Should the entire world be the geographic region for the market for refrigerators? That is an empirical question If the cross price elasticities for refrigerator brands worldwide are high, then one would conclude that the world is the relevant geographical definition of the market In the 1980s both the courts and the Justice Department held that bigness did not necessarily translate into badness, and corporate mergers proliferated In the period 1982–1989 there were almost 200 mergers and acquisitions of firms whose value exceeded $1 billion The total value of these companies was nearly half a trillion dollars Megamergers continued in the 1990s and into the 21st-century In 2000, there were 212 mergers valued at $1 billion or more and in 2006 nearly that many Since then, merger activity has decreased, in part due to turmoil in financial markets [2] KEY TAKEAWAYS  The government uses antitrust policies to maintain competitive markets in the economy  The Sherman Antitrust Act of 1890 and subsequent legislation defined illegal business practices, but these acts are subject to widely varying interpretations by government agencies and by the courts  Although price-fixing is illegal per se, most business practices that may lessen competition are interpreted under the rule of reason  The Justice Department and Federal Trade Commission use the Herfindahl-Hirschman Index to determine whether mergers should be challenged in particular industries Attributed to Libby Rittenberg and Timothy Tregarthen Saylor URL: http://www.saylor.org/books/ Saylor.org 851