Reference no: EM131699292

Question:  In 1983, the U.S. Justice Department agreed to drop a consent decree that it had extracted from Safeway (a big grocery store chain) in the 1950s.  Please look up the meaning of a "consent decree".

Background: Years ago, the consent decree prohibited Safeway from selling its goods at "prices below the cost" of acquiring grocery products or at "unreasonably low prices" that might be below cost.  The decree stemmed from a government suit that had accused Safeway of selling below cost in an effort to monopolize the market for retail food in Texas and New Mexico.  In other words, the Justice Department, through the consent decree, wanted Safeway to sell at prices that are above costs.

a. How likely is it that Safeway or anyone else would be able to monopolize the market for retail food in two states when prices are below costs?

b. The alleged attempt to monopolize led Safeway to reduce prices to customers.  Who do you suppose complained to the Justice Department about Safeway's behavior?

c. Do you think that years ago Safeway fought the US Department of Justice against the consent decree?