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What is the Ssnip test used for?

What is the Ssnip test used for?

The SSNIP test seeks to identify the smallest relevant market within which a hypothetical monopolist or cartel could impose a profitable significant increase in price. The relevant market consists of a “catalogue” of goods and/or services which are considered substitutes by the customer.

What is the hypothetical monopolist test?

In antitrust law, under the Horizontal Merger Guidelines, the hypothetical monopolist test is used as a framework to determine if a relevant product market is properly defined as a first step before it is determined whether a company has monopoly power in that market violating antitrust law.

What are the Brown Shoe factors?

Supp. 2d 172, 189 (D.D.C. 2001) (“Thus, the Brown Shoe factors — especially industry recognition and the peculiar characteristics and uses of the product — support a finding that internal hotsites fall within the same product market as shared hotsite services.”); FTC v. Swedish Match N.

What is the SSNIP test in anti trust law?

The SSNIP test enables us to identify the relevant market for the purposes of analysis but that is just the start of any anti-trust inquiry. The real issue in every case is not what the market is, but how competitive it is (or how a merger affects competition).

What is the SSNIP test in anti trust law?’?

Hypothetical Monopolist Test: “requires that a hypothetical profit-maximizing firm that was the only present or future producer of the relevant product(s) located in the region would impose at least a SSNIP from at least one location, including at least one location of one of the merging firms.”

What is critical loss analysis?

Ultimately, critical loss analysis seeks to test the effect of a price increase on profitability; specifically, it seeks to determine the ‘critical’ threshold of sales loss above which the price increase becomes unprofitable.

When there is only one buyer in the market?

A monopsony is a market condition in which there is only one buyer, the monopsonist. Like a monopoly, a monopsony also has imperfect market conditions. The difference between a monopoly and monopsony is primarily in the difference between the controlling entities.

What is Section 7 of the Clayton Act?

Section 7 of the Clayton Act prohibits mergers and acquisitions where the effect “may be substantially to lessen competition, or to tend to create a monopoly.” As amended by the Robinson-Patman Act of 1936, the Clayton Act also bans certain discriminatory prices, services, and allowances in dealings between merchants.

What is the Elzinga hogarty test?

Elzinga-Hogarty Test. The Elzinga-Hogarty test was designed to analyze commodity movements, not hospital mergers. It was proposed by two economists in an article critiquing the Agencies’ geographic market definitions in two non-hospital merger cases.

What is the formula for the criticality cost of loss?

The critical loss is the percentage reduction in quantity, -Dq/q, that satisfies condition (2). percentage reduction in quantity would be 10 percent. Loss Critical + = . The formula for the critical loss in (4) shows that for a given price increase of X percent, the critical loss is smaller the larger is the margin.

What is oligopsony market?

An oligopsony is a market for a product or service which is dominated by a few large buyers. The concentration of demand in just a few parties gives each substantial power over the sellers and can effectively keep prices down.

What is the difference between oligopoly and monopoly?

A monopoly occurs when a single company that produces a product or service controls the market with no close substitute. In an oligopoly, two or more companies control the market, none of which can keep the others from having significant influence.