Two firms with monopoly power in vertically related industries (such as a franchise and its regional sports broadcasting network) merge. Why might consumers benefit from such a merger?
- The merged company has less of an incentive to maximize profit than does each firm acting individually
- One firm now has less of an incentive to monopoly price any good or service that is a cost to the other firm
- The merged company has less of an incentive to use its monopoly power in the market for any final good or service
- The merged company will be in violation of anti-trust laws.
IT does not exactly pop out to me on what the benefit would be from a consumer point of view