Title

Input Market Definition under Department of Justice Merger Guidelines

Document Type

Article

Journal/Book Title/Conference

Review of Industrial Organization

Volume

4

Publication Date

1989

First Page

99

Last Page

114

Abstract

This paper applies the Justice Department's Merger Guidelines to define a relevant antitrust market for an input. An expression for the elasticity of the residual demand facing a monopoly supplier of a factor of production is derived. It is shown that proper input market definition depends on the elasticity of residual demand confronting the downstream input users, on the supply elasticity in the downstream market (which, in turn, depends on the rate of capital depreciation there), on the cost of the input as a percentage of downstream sales, and on the extent to which the monopolist is integrated downstream.

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