If Walmart were to merge with another company, why might the US government intervene in the market process?Assuming that Walmart wants to expand and a merger is its only option, justify the...

If Walmart were to merge with another company, why might the US government intervene in the market process?

Assuming that Walmart wants to expand and a merger is its only option, justify the rationale for the intervention of government in the market process in the US.

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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The reason for this would have to do with antitrust law.  Basically, antitrust law is meant to protect consumers by preventing any one firm from gaining too much market share in a given market.  The US government might intervene in the merger process if it felt that the merger between Walmart and the other company would give Walmart too much market share.  The reason for this is that the government would fear that Walmart would use its huge market share to abuse consumers.  It might raise prices, for example, knowing that consumers had no other choice as an alternative to Walmart.  It is for this reason that the government might intervene if Walmart were to try to merge with another company.

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