Page 822 - Krugmans Economics for AP Text Book_Neat

c. EAuction stopped its practice of eliminating fees for new d.EAuction is now a monopolist in the Internet auction in-
sellers. But since it provided much better technical service dustry. It also owns a site that handles payments over the
than its rival, EMarketplace, buyers and sellers came to Internet, called PayForIt. It is competing with another Inter-
prefer EAuction. Eventually, EMarketplace closed down, net payment site, called PayBuddy. EAuction has now stipu-
leaving EAuction as a monopolist. Should the Justice lated that any transaction on its auction site must use
Department intervene to break EAuction into two PayForIt, rather than PayBuddy, for the payment. Should
companies? Explain. the Justice Department intervene? Explain.

780 section 14 Market Failure and the Role of Gover nment