Reading Comprehension

PT3 · S3 · P3 · Q16 Antitrust Law

A free, expert breakdown of this official LSAT Reading Comprehension question.

Save & drill this skill — build targeted practice sets from questions like this one
Video walkthroughs — watch every question solved step by step
81 official LSATs — as questions, timed sections & full-length tests

Start practicing free

One type of violation of the antitrust laws is the abuse of monopoly power.

Topic

Abuse of monopoly power under antitrust laws

Framework

Answer / Explain

Main Point

The antitrust laws do not exist to eliminate monopolies or high prices alone; instead, they target and prohibit the abuse of monopoly power, specifically when it is used to exclude competition and thus harm consumer welfare. ( - last paragraph)

P1: Definition and Requirements for Abuse of Monopoly Power

The paragraph defines monopoly power as the ability to set prices above the competitive level without losing too many customers, and explains that antitrust laws only come into play if (1) a firm has monopoly power and (2) abuses it to exclude competition.

P2: Market Share and Pricing Constraints

Explains that a firm’s ability to raise prices depends on whether customers have substitute options. If a firm owns a large market share in substitutable products, it gains monopoly power, so market share becomes a helpful (but rough) measure for courts.

P3: High Prices vs. Abuse—Not All Monopolies Break the Rules

Discusses how simply having high prices (supracompetitive prices) or high market share—even driving competitors out through low prices—isn’t illegal. The law cares more about harm to consumer welfare than the existence of high prices or monopolies by themselves.

16.

Which one of the following distinctions between monopoly power and the abuse of monopoly power would the author say underlies the antitrust laws discussed in the passage?

Monopoly power is assessed in
Not a Distinction: share vs. control
This doesn't line up with any of our available distinctions about abuse: - excluding competition from your/related markets - hurting consumers' welfare - lowering the quality or quantity of products available to consumers At the end of the 2nd paragraph, we're told that for all monopoly power, courts use market share as a rough indicator. It's not even clear how market "control" is different from market share. The passage never distinguishes those from each other.
18% picked this
Monopoly power is easy to
Not a Distinction
Not a Distinction: easy/hard to demonstrate This doesn't line up with any of our available distinctions about abuse: - excluding competition from your/related markets - hurting consumers' welfare - lowering the quality or quantity of products available to consumers The passage never discusses the comparative ease or difficulty of demonstrating monopoly power vs. abusive monopoly power. We know that monopoly power is often determined by market share, which seems fairly easy to demonstrate. But we know that abuses of monopoly power are shown by excluding competition such as in tying arrangements (if a tying arrangement exists, that should make an abuse pretty easy to demonstrate too). If the quality/quantity of products available within a market were getting lower, that also seems pretty easy to demonstrate. So it doesn't seem like we can take the things we know about determining monopoly power vs. determining abuse of monopoly power and make our own common sense judgment about whether one is easier to demonstrate than the other.
1% picked this
Monopoly power involves only one
Not a Distinction
Not a Distinction: one vs. multiple markets This doesn't line up with any of our available distinctions about abuse: - excluding competition from your/related markets - hurting consumers' welfare - lowering the quality or quantity of products available to consumers It's possible for your company to abuse its monopoly power by excluding competition from your company's market, so it's not fair to say that abuse has to involve at least two or more related markets.
13% picked this
Monopoly power is the ability
Not a Distinction: ability vs. use
This doesn't line up with any of our available distinctions about abuse: - excluding competition from your/related markets - hurting consumers' welfare - lowering the quality or quantity of products available to consumers And the 3rd paragraph clarifies that using monopoly power to charge supracompetitive prices does not by itself constitute an abuse of monopoly power.
9% picked this
Correct
Monopoly power does not necessarily
Why this is right
This matches the distinction we get in the final paragraph: - excluding competition from your/related markets - hurting consumers' welfare - lowering the quality or quantity of products available to consumers It is echoed at other times as well, that consumer welfare is the litmus test for whether something is an abuse of monopoly power and thus subject to antitrust laws. For example, it's legal and not abusive for Wal-Mart to use its economy of scale to charge prices so low that its competitors cannot survive. Even though that is sort of chasing competitors out of the market, it is doing so in a way that seems to benefit consumers' welfare (they can get products they want for lower prices than they'd have to pay if they bought those products via competitors). The final sentence of the passage provides the best support for this answer. Because the primary purpose of antitrust laws is to promote consumers' welfare, those laws focus on the abuse of monopoly power, rather than on the monopoly power itself. The logic of that sentence implies that there's a distinction between abuses of monopoly power and mere monopoly power itself, when it comes to consumers' welfare.
Skill tested: Inference · how this choice captures the passage's function is the move to repeat next time.
59% picked this

Continue the review in LSAT Lab

Save this question, watch the video walkthrough, and drill similar questions in your LSAT Lab account.

Save and practice this skill

LSAT Lab

Turn this review into a targeted study plan.

Save this question, drill more like it, watch the video walkthrough, and track your progress in your LSAT Lab account.

Start practicing free