A new technology company has emerged, rapidly acquiring smaller competitors in the tech industry. As they grow, they start setting prices significantly higher than market value, leading to concerns that they may be establishing a monopoly. What should be the appropriate action based on the Sherman Antitrust Act principles?

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Under the Sherman Antitrust Act, a company that buys competitors and then raises prices above the market level is suspected of monopolizing the market, which is prohibited. The appropriate action is to launch a formal investigation by the Department of Justice or the Federal Trade Commission to examine whether the company’s conduct violates the Act’s prohibition on monopolization and price‑fixing. If the investigation finds evidence of monopoly abuse, the agency can file a lawsuit, impose fines, and require remedies such as divesting the acquired firms or curbing the price‑setting practices. For example, if a firm buys five small rivals and then charges customers twice the usual price, the agency would likely order the firm to stop the price hikes and possibly break up the company to restore competition. This process protects consumers and ensures a competitive market.

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