Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
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Chapter 13, Problem 8SQP
To determine
Acceptability of the statement.
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Students have asked these similar questions
Is the following statement correct? "The antitrust laws in reality deal less with monopolies than with oligopolies."
Which 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The Sherman Act in 1980 eliminated and repealed all existing U.S. anti-trust laws.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.
The Clayton Act of 1914 classifies several business practices as illegal, including price discrimination and tying contracts, if they "substantially lessen competition or tend to create a monopoly."
The Clayton Act of 1914 is an example of which of the following?
Price regulations or Antitrust laws
Chapter 13 Solutions
Micro Economics For Today
Ch. 13.2 - Prob. 1YTECh. 13.6 - Prob. 1.1YTECh. 13.6 - Prob. 1.2YTECh. 13 - Prob. 1SQPCh. 13 - Prob. 2SQPCh. 13 - Prob. 3SQPCh. 13 - Prob. 4SQPCh. 13 - Prob. 5SQPCh. 13 - Prob. 6SQPCh. 13 - Prob. 7SQP
Ch. 13 - Prob. 8SQPCh. 13 - Prob. 9SQPCh. 13 - Prob. 10SQPCh. 13 - Prob. 11SQPCh. 13 - Prob. 12SQPCh. 13 - Prob. 1SQCh. 13 - Prob. 2SQCh. 13 - Prob. 3SQCh. 13 - Prob. 4SQCh. 13 - Prob. 5SQCh. 13 - Prob. 6SQCh. 13 - Prob. 7SQCh. 13 - Prob. 8SQCh. 13 - Prob. 9SQCh. 13 - Prob. 10SQCh. 13 - Prob. 11SQCh. 13 - Prob. 12SQCh. 13 - Prob. 13SQCh. 13 - Prob. 14SQCh. 13 - Prob. 15SQCh. 13 - Prob. 16SQCh. 13 - Prob. 17SQCh. 13 - Prob. 18SQCh. 13 - Prob. 19SQCh. 13 - Prob. 20SQ
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- Unsure which is the correct answer The Clayton Act of 1914 classifies several business practices as illegal, including price discrimination and tying contracts, if they "substantially lessen competition or tend to create a monopoly." The Clayton Act of 1914 is an example of which of the following? Price regulations or antitrust lawsarrow_forwardUse the DuPont cellophane antitrust case to illustrate and explain in detail how the definition of a market can affect the determination of market concentration.arrow_forwardA monopoly, unlike a perfectly competitive firm, has some market power. Thus, it can raise its price, within limits, without quantity demanded falling to zero. The main way monopolies retain their market power is through barriers to entry, which prevent other companies from entering monopolized markets and competing for customers. Consider the market for taxi services. In order to own and operate a taxi, drivers are required to obtain a taxi medallion. Which of the following best explains the barriers to entry that exist in this scenario? Increasing returns to scale Control over an important input O Legal barriersarrow_forward
- The accompanying graph depicts the marginal revenue (MR), demand (D), and marginal cost (MC) curves for a monopoly. Suppose the monopolist able to successfully price discriminate between two groups by charging one group $60 and charging $35 to the other group. c. What are the firm's profits if it charges the two prices as mentioned above?arrow_forwardMonopolists, unlike competitive firms, have some market power. A monopolist can increase price, within limits, without the quantity demanded falling to zero. The main way it retains its market power is through barriers to entry-that is, other companies cannot enter the market to create competition in that particular industry. Complete the following table by indicating which barrier to entry appropriately explains why a monopoly exists in each scenario. Barriers to Entry Scenario During most of the 1900s, the De Beers Group of South Africa was viewed as a monopoly because it controlled a large percentage of diamond production and sales. In the natural gas industry, low average total costs are obtained only through large-scale production. In other words, the initial cost of setting up all the necessary pipes and hoses makes it risky and, most likely, unprofitable for competitors to enter the market. In an imaginary country, there is only one federally licensed lottery agency in any…arrow_forwardU.S. antitrust laws are designed to prohibit monopolization and encourage competition. Why, then, does the government erect barriers to entry and create monopoly power by granting firms patents?arrow_forward
- can you find examples of monopolies or near monopolies whose position can be attributed to public intervention? Elaborate on possible costs of monopoly in those cases.arrow_forwardOnly one firm produces and sells San Francisco Giants baseball hats in the country of NoDodgers, and as the story begins, international trade in baseball hats is prohibited. The equations that describe the monopolist's demand, marginal revenue, total cost, and marginal cost are given by • Demand: P = 10 - Q. Marginal revenue: MR 10 - 2Q. • Total cost: TC = 3+Q+ ½ Q². Marginal cost: MC 1+Q. - = The monopolist produces type your answer... type your answer... baseball hats, which are sold at a price of $ type your answer... per hat. The monopolist's profit is $arrow_forwardRefer to Diagram 2 above, which represents a monopolist firm, to answer the following questions. product = marginal product x selling price per unit). What quantity will this firm produce and what price will it charge? Suppose this monopolist firm becomes regulated and the regulatory agency wants to achieve economic efficiency. What price would the agency require the monopoly to charge and what quantity will the firm produce as a result? If the monopolist charges a price that will achieve economic efficiency, will the monopolist be making a profit or loss? Explain your answer with a calculation. Now suppose the government regulates the monopoly by imposing a price ceiling of $60. How many units will be produced? Will every customer who is willing to pay the ceiling price of $60 be able to buy the product? Explain why or why not. Based on the price ceiling of $60, what will be the profit of this monopolist?arrow_forward
- Two examples of government monopolies, expound the rationale for the granting of monopoly rights in their examples.arrow_forwardNatural monopolies are often regulated by governments. What are the advantages and disadvantages of using marginal cost pricing to regulate a natural monopolist?arrow_forwardDraw a sketch of the graph to answer the following question: When the demand curve is more elastic, does the monopolist have more or less market power? Draw a sketch of demand curves, marginal revenue curves, and marginal cost curves to support your answer.arrow_forward
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