b. Staples and Office Depot argued that, while in some parts of the country they might create a monopoly in the office supply superstore market, the FTC should consider the larger market for all office supplies, which includes many smaller stores that sell office supplies (such as grocery stores and other retailers). In that market, Staples and Office Depot would face competition from many other, smaller stores.
If the market for all office supplies is the relevant market that the FTC should consider, would it make the FTC more or less likely to allow the merger?
Less likely; the merger would increase prices not only at office superstores but also at other retailers.
More likely; that smaller stores exist in the market means that the market is closer to perfect competition.
More likely; whereas a merger between Staples and Office Depot would have created a monopoly in the office supply superstore market, the market for office supplies would still have some intact competition after the merger. The FTC would be no more or less likely to approve the merger. The relevant factor is the size of the firms under review, not the size of the market in which they exist.
Less likely; having the smaller stores compete against a Staples-Office Depot conglomerate would likely result in the smaller stores being run out of business, reducing the overall level of competition in the long run.
