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Old 12-16-2007, 01:10 AM   #1
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Default From New York Times: “United Airlines and US Airways announced today that they had called off their proposed


merger after the Justice Department threatened to file a lawsuit to block the $4.2 billion deal, calling it anticompetitive.” Why would the Justice department care if two airlines merge?

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Old 12-16-2007, 02:07 AM   #2
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Default From New York Times: “United Airlines and US Airways announced today that they had called off their proposed

If there are more firms in the market there is more competition. If there is more competiton prices get bid down as companies compete for business. Lower prices are good for consumers (who also vote and outnumber business people) while higher prices are good for businesses. The Justice Department's Anti-Trust division is tasked with fighting monopolistic behavior on the part of firms because monopolies are not good for consumers but consumers lack the power to fight monopolies.
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