ECO 540 Final Project Part Two: Milestone One

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ECO 540 Final Project Part Two: Milestone One

 

Southern New Hampshire University

 

 

Background and Issues

  1. Historical context and mission

The United States Department of Justice (DOJ) was created in the June 1870, by a statute, that is, the Judiciary Act of 1789. The Attorney General is the head of this department. Thomas Jefferson once stated, “The most sacred of the duties of government [is] to do equal and impartial justice to all its citizens” (Wara, 2016, p. 172). The guiding ideal for men and women of the DOJ is the sacred obligation to ensure the promise of justice is fulfilled. The Department of Justice is headquartered in Washington. However, much of its work is carried out in offices that are located in different parts of the country as well as overseas.

The mission of the Department of Justice is to make sure that laws are enforced and the interests of the people of the United States are defended; to make sure there is impartial and fair administration of justice for all citizens of the country; to ensure there is just punishment for individuals and organization found guilty of behavior that unlawful; to offer federal leadership in controlling and preventing crime; and to make sure there is public safety against domestic and foreign threats.  The department should ensure that the Americans are protected from all threats.

  1. Key salient merger issues

The paper is basically base on merger. Mergers occur between companies. The merger of American Airlines to another competitor in the market will be considered. In this scenario, American Airline would like to merge with its competitor that is US Airways.

In regards to the Department of Justice, there may be some salient issues present in this merger between American Airlines and US Airways. The first issue is that merging of these two companies may bring about unfair competition in the marketplace (Von Kalinowski, Sullivan, McGuirl, Folsom, & Fine, 2016). Additionally, there may monopoly or oligopoly due to the merging of the American Airlines and US Airways. Unfair competition will make competition in the market place not to be fair. A market that is not free due to unfair competition will not benefit American consumers. This is because the prices of services will go up, there will be reduced choices when selecting services, and quality of services may go down as a result of monopoly or oligopoly.

Oligopoly and monopoly reduces the level of competition in the market. With reduced competition the organization will not compete so much on price and quality. Merging of the American Airlines and US Airways will lead to the creation of one big company. Having a very big and strong competitor in the market will make the playing field not to be leveled for other competitors in the market, such as Southwest Airlines, United Airlines, and JetBlue Airlines. Anti-competition restraints will be felt by the other competitors in the market. This corporate merger of these two big players may bring down competitive vigor in domestic market as well as other markets where the firms are operating. The Department of Justice may believe that the act by these two companies is predatory. The act is designed to bring in and maintain the element of monopoly in different markets these firms are operating.

  • Significance of HHI (Concentration ratio)

It will be possible to measure the market concentration through the use if the Herfindahl-Hirschman index (HHI) (Naldi & Flamini, 2014). The Herfindahl-Hirschman index for domestic market, 10 markets operated by the firms, and two hubs will be gotten through squ…………….