The approach of antitrust law toward excessive pricing a matter of policy or fairness?
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This essay analyzes the approach of antitrust law toward excessive pricing, inquiring whether antitrust law should be enforced against excessive pricing as a matter of policy and/or fairness. Upon examination of basic concepts of price theory to explain why price matters, and brief review of literature regarding criteria to define excessive pricing, this essay concludes that excessive pricing should not be subject to prosecution as a matter of policy, but abusive pricing should be subject to prosecution as a matter of fairness, provided that the firm has significant market power and faces an inelastic demand curve.
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