To restrict a firm's monopoly power, why can't antitrust authorities just set a floor or a ceiling in the market? OA. It is difficult to set a fair price, so regulators do not get involved in the pricing decisions of any monopolists. B. It is difficult to set a fair price, and even if regulators did, the firm would then have no incentive to innovate. OC. The government does not have the power to dictate what a firm can charge; it can only stop mergers. OD. Floors or ceilings lead to inefficiency and deadweight loss, which can be avoided if the monopoly sets its own price.

To restrict a firm's monopoly power, why can't antitrust authorities just set a floor or a ceiling in the market? OA. It is difficult to set a fair price, so regulators do not get involved in the pricing decisions of any monopolists. B. It is difficult to set a fair price, and even if regulators did, the firm would then have no incentive to innovate. OC. The government does not have the power to dictate what a firm can charge; it can only stop mergers. OD. Floors or ceilings lead to inefficiency and deadweight loss, which can be avoided if the monopoly sets its own price.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The Tournament of Today - A Set-To Between Labor and Monopoly C MONOPOLY Friedrich Graetz, "The Tournament of Today - A Set-To Between Labor and Monopoly." August 1, 1883. Historians could use this primary source to discuss the power of monopolies in the nineteenth century. The industrial worker is attempting to fight management with a sledge hammer labeled "strike" and is riding a horse labeled "poverty." This is a political cartoon that portrays the ability of labor to defeat capitalists through the power of the strike. This image portrays the battle between reformers and business. Looking at the shield the Knight of Labor carries, the artist is critical of the power monopolies have in corrupting legislatures. es h VA DV. oa.. ort.. Pa... ort... ent...
In the United States, antitrust laws O A. regard excess competition as a felony under Section 3 of the Sherman Act. O B. place a maximum limit of 125 firms that are allowed to compete in any market. O C. do not always prosecute firms if they have fixed their prices. D. do not allow one person to be a director of two competing firms if being a member "substantially lessens competition". E. break up a company if it is too large because "size itself is an offense."
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According to Brozen, which of the following groups benefitted from monopoly returns in the shipping industry? A. railroad investors B. shippers of high-value commodities C. consumers D. labor unions
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What is the government's policy on collusion in the United States? Explain the rationale for this policy. In the United States A. the government makes collusion illegal with antitrust laws because monopolies create deadweight loss OB. the government encourages collusion with subsidies because resulting profits can be used to develop new products. OC. the government makes collusion unnecessary with government-imposed barriers to entry because monopolies enhance economic efficiency OD. the government makes collusion legal with antitrust laws because monopolies create no deadweight loss. OE. the government promotes collusion with the Federal Trade Commission because perfectly competitive markets enhance economic efficiency.
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2. a. State the assumptions of monopoly.
A. If public utilities are a natural monopoly, whatwould be the danger in deregulating them? B. If public utilities are a natural monopoly, whatwould be the danger in splitting them into a number ofseparate competing firms? C.Why does regulatory capture reduce thepersuasiveness of the case for regulating industries forthe benefit of consumers?