In 1993, Whitman and Russell Stover candy companies announced merger plans. I didn't work on this merger, but two of my colleagues were hired by the candy companies to determine whether the FTC should/would sue to stop the deal. In your discussion response, please give an answer to one or more of the following questions. Check back in during the week to see if you can contribute more.
Questions:
If you were an economist for the FTC or the candy companies, how would you go about determining whether the merger breaks the antitrust laws?
What is the relevant market you would analyze? (That is, which products and which geographic area(s) would you focus on? In other words, how would you label the horizontal axis of you supply and demand curve graph? Hint: What product do both companies sell?)
Think about these questions with the economics you know. Don't worry about getting the "right" answer. Good economists could come to different conclusions on these questions. I'm primarily interested in getting you to use the economics you've learned to answer real-world questions. You'll get full credit if you participate in a thoughtful way.