Because the application of antitrust law relies heavily on economic principles and analyses of potential outcomes, it's worthwhile to take a look at what economists have to say about the structure and operation of American business. Antitrust Basics Antitrust economics is part of a branch of economics known as industrial organization, which attempts to explain the structure and competitive behavior of firms and industries. 2 Examples of dominant firms are IBM in the market for mainframe computers and Kodak in the photographic film market. Since it is the exercise of monopoly or market power that is problematic, economists and policymakers are more concerned about the way firms in an industry behave than the structure of the industry per se. Indeed, in some circumstances, a monopoly structure yields the most efficient, socially desirable outcome.
Natural monopolies are one example.
They occur in markets in which additional output can be produced at a lower per-unit cost, such as the public utility industries. Monopolies are even encouraged in other types of markets. Section 1 of the Sherman Act prohibits restraint of trade. The courts, however, have interpreted the act less literally, saying that it merely forbids monopolistic behavior. The act also entitles plaintiffs that successfully bring antitrust suits to treble damages and attorneys fees.