Overcharge

Overcharge is an economic term used in legal discourse about price fixing violations. An overcharge is the difference between what a buyer or seller actually pa

Overcharge

Overcharge is an economic term used in legal discourse about price fixing violations. An overcharge is the difference between what a buyer or seller actually paid for a good purchased from a cartel and what the buyer or seller would have paid in the absence of a price-fixing cartel. The total amount of the overcharges paid by customers of a cartel is the major component of damages that can be recovered by plaintiffs in private antitrust suits. Under U.S. federal antitrust law, buyers injured by cartel overcharges are entitled to triple the overcharges that they are able to prove in court.

The overcharge has a one-to-one relationship to the Lerner Index, the most common measure of market power in economics. Both measures employ the same numerator (PM - PC), where PM is the observed market price and PC is the competitive benchmark price, but use different denominators. The overcharge ratio is (PM-PC)/PC, whereas the Lerner Index is (PM-PC)/PM. Both ratios are zero when a market is perfectly competitive or a cartel is ineffective in raising prices. The Lerner Index has an upper limit of one when the pure monopoly price is charged in a market. The overcharge has no upper limit.

Content Disclaimer

Informasi ini disarikan dari Wikipedia dan disajikan kembali untuk tujuan edukasi. Konten tersedia di bawah lisensi CC BY-SA 3.0. Kami tidak bertanggung jawab atas ketidakakuratan data yang bersumber dari kontribusi publik tersebut.

  1. The information displayed on this website is sourced in part or in whole from Wikipedia and has been adapted for the purpose of restating it. We strive to provide accurate and relevant information, however:
  2. There is no guarantee of absolute accuracy. Wikipedia is an open, collaborative project that can be edited by anyone, so information is subject to change.
  3. It is not intended to constitute professional advice. The content displayed is for informational and educational purposes only. For important decisions (e.g., medical, legal, or financial), please consult a professional.
  4. Content copyright. Wikipedia is licensed under the Creative Commons Attribution-ShareAlike License (CC BY-SA). This means that content may be reused with appropriate attribution and shared under a similar license.
  5. Responsible use. Any risk arising from the use of information from this website is entirely the responsibility of the user.