December 1991 LSAT Section 3 Question 16

Which one of the following distinctions between monopoly power and the abuse of monopoly power would the author say u...

BritneyS on July 21 at 08:53PM

Why is it E?

The passage says that supra competitive prices ultimately lower consumer welfare but is NOT considered abuse of a monopoly. So how would E be right in saying that abuse of a monopoly is when consumer welfare is being impacted when this example in the passage says otherwise in that is is not an example of monopolistic abuse?

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Emil-Kunkin on August 1 at 06:51PM

I think that SC prices are only one example of monopoly power. The passage goes through another example of monopoly power in paragraph three, in which I don't think we know for sure if the Walmart like firm is using sc prices. This is an example of monopoly power actually increasing welfare, at least in theory. I think the final paragraph is the best evidence we have for E. It more or less tells us that the point of antitrust law is to max consumer welfare.