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In 1890, the Sherman Anti-Trust Act broke up the monopoly that John D. Rockefeller and his company, Standard Oil, had on the oil industry. In 1914, the federal government was sold on the concept of universal telephone service provided by Ma Bell, a monopoly that was ended by the development of a new technology. In 1998, the U.S. government filed a suit against the world’s largest software company, Microsoft, for participating in anti-competitive practices. These stories explain what monopolies are, and why government sometimes chooses to intervene.
To help viewers understand that the degree to which a firm controls the market affects prices and economic efficiency, and that the government tries to prevent or regulate monopolies.
Prominent attorney involved in many high-profile cases, including United States v. Microsoft, during which Bill Gates said that Boies was “out to destroy Microsoft” but the Washington Monthly called him “a latter-day Clarence Darrow.” He also represented Vice President Al Gore in Bush v. Gore; defended CBS in an action brought by General William Westmoreland; defended Napster when the company was sued for copyright infringement; and is representing filmmaker Michael Moore regarding a Treasury Department investigation into Moore’s trip to Cuba while filming for Sicko. Earlier, he was Chief Counsel and Staff Director of the United States Senate Antitrust Subcommittee and served as Chief Counsel and Staff Director of the United States Senate Judiciary Committee. Mr. Boies received his B.S. from Northwestern University and L.L.B. from the Yale Law School.
Telecommunications attorney and law professor specializing in United States communications policy-making and regulation. He worked at the Federal Communications Commission (FCC) at several intervals from 1949 until 1973, serving as General Counsel and then as Assistant to FCC Chairman Dean Burch. He later served as Administrator of the National Telecommunications and Information Administration during the Carter presidency. He proposed that funds raised from spectrum auctions be dedicated to the development of public broadcasting services, much like the traditional British model of public support for national programming. His contributions to national telecommunications policy led to the National Civil Service Award in 1970. In retirement, he has served as a telecommunications adviser for nongovernmental organizations, including Duke University’s Washington Center for Public Policy Research, the Rand Corporation, and the Markle Foundation. Mr. Geller received his B.S. from the University of Michigan and J.D. from Northwestern Law School.
Take the Economics USA: Monopoly Quiz.
Quiz Addendum
5. The regulatory agency is likely to establish a maximum price of…
Answer:
OB: The commission will set the maximum price at the level where the average cost curve intersects the demand curve.