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Two firms with monopoly power

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Two firms with monopoly power in vertically related industries (such as a franchise and its regional sports broadcasting network) merge. Why might consumers benefit from such a merger?

  • The merged company has less of an incentive to maximize profit than does each firm acting individually
  • One firm now has less of an incentive to monopoly price any good or service that is a cost to the other firm
  • The merged company has less of an incentive to use its monopoly power in the market for any final good or service
  • The merged company will be in violation of anti-trust laws.

IT does not exactly pop out to me on what the benefit would be from a consumer point of view

Reference no: EM132047750

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