Microeconomics (MindTap Course List)
10th Edition
ISBN: 9781285859484
Author: William Boyes, Michael Melvin
Publisher: Cengage Learning
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Question
Chapter 14, Problem 5E
To determine
To find:
The basis of the given items given is in accordance with which policy: antitrust, social regulation, or economic regulation.
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How would you expect antitrust authorities to react to: a. A proposed merger of Ford and General Motors. b. Evidence of secret meetings by contractors to rig bids for highway construction projects. c. A proposed merger of a large shoe manufacturer and a chain of retail shoe stores. d. A proposed merger of a small life-insurance company and a regional candy manufacturer. e. An automobile rental firm that charges higher rates for lastminute rentals than for rentals reserved weeks in advance
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- Which of the following is the correct name for the idea that certain firms prefer government regulation because regulation shields them from the pressures of competition and, in effect, guarantees them a regulated profit. a. The public interest theory of regulation. b. The structuralists’ theory of monopoly. c. The legal cartel theory of regulation. d. The public regulation theory of natural monopolyarrow_forwardWhat is the most controversial aspect of Antitrust regulation? Group of answer choices Defining the allowable size the merged firm should be. Defining a market Sending violators to jail. Agreeing on which concentration measurement to use.arrow_forwardAntitrust laws are designed to maintain a competitive market environment by a. eliminating monopolies wherever they exist b. preventing monopolies from generating negative externalities c. limiting practices that increase a firm’s market power d. imposing price ceilings on products produced by monopolies e. making charging a price above marginal cost illegalarrow_forward
- Definition of Economic Theory of Government Regulationarrow_forwardDescribe how government can address market failures such as pollution externalities and mitigate some of the negative effects on consumers that unchecked monopolies can have? First specify or define the negative effect these market failures have on consumers and then describe what specific interventions the government can make to address them. Two sections to your answer: Part 1: pollution externality Part 2: Monopoly Powerarrow_forwardGovernment intervention can focus on the structure or behavior of a market. Antitrust focuses: Select one: a. Mostly on structure, while regulation focuses on behavior b. Mostly on behavior, while regulation focuses on both c. On both, while regulation focuses mostly on the level of competition within an industry d. On both, while regulation focuses mostly on structurearrow_forward
- Which of the following is not one of the three basic situations in which regulation is imposed? a. externalities b. natural monopoly c. price fixing d. imperfect informationarrow_forwardWhich of the following is true of antitrust laws in the United States? Group of answer choices Economists unanimously agree on the usefulness of antitrust action to increase the competitiveness of industries. They were embedded in the U.S. Constitution but mostly eliminated in the early 1900s. The Sherman Act in 1980 eliminated and repealed all existing U.S. anti-trust laws. Historically they have been abused by some competitors going after other competitors in ways that are detrimental to consumers.arrow_forwardMatch each of the terms to their description: Shutdown Point A. something that keeps new firms from joining a market B. legal protection for inventions C. legal protection for books and music D. a firm that operates as a monopolist Price maker Barriers to Entry Copyright E. revenues do not cover its average variable costs Patentarrow_forward
- In your opinion, what is the best way to deal with the monopoly power problem? Do you advocate antitrust laws or regulations? How might Christian ethics relate to finding solutions to these problems? Initial post should be 200-300 words, not counting citations.arrow_forwardAnswer the given question with a proper explanation and step-by-step solution. Why is it important for the United States to have laws such as the Sherman Antitrust Act and the Clayton Antitrust Act? Can you describe corporations today that are taking such a large part of market share that it's difficult for smaller companies to enter the market?arrow_forwardWORD LIMIT – MAXIMUM 500 WORDS Using the Monopoly model, show using diagrams how a monopolist may sustain abnormal profits for the indefinite future. Should the competition commission litigate against firms who have a dominant market position? In your answer, make sure you use a diagram, list the assumptions for the model, and give examples of real world markets that may be dominated by monopolists. The diagram used should be your own and not taken from another source.arrow_forward
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