Suppose you buy regularly from a firm that wants to merge with another firm in the same industry. You might worry that the merged firm would use its increased market power to raise the price you pay. But imagine if you notice that these two firms’ other competitors are among those clamoring for the government to prevent the merger.

Would these other competitors oppose the merger if they thought the merger would raise prices for what you bought? Not likely. If that is what they thought would happen, these other competitors would love the merger — because it would allow them to raise their own prices somewhat, or to keep their prices the same but sell more.

If they oppose the merger, the reason is far more likely to be that they fear the net effect would be to lower the prices of the goods or services they sold — which means that consumers would be better off with the merger than without.

How can a merger lead to lower prices? A larger firm might have increased market power, allowing it to raise prices; but the larger firm might have economies of scale, leading to reduced costs and lower prices.

Which effect the merger would create is of course uncertain — but what competing firms think about the proposed merger is a very strong clue, as they typically have more information about the market than do the regulators. When competitors oppose a merger — as is the case of “free radio” broadcasters with regard to Sirius and XM — they must be making a judgment that the “economies-of-scale effect” outweighs the “market-power effect.” The FCC should take them at their word.