Competition and Regulation

When the pricing of goods or services are at such a low level that other suppliers cannot compete and are forced to leave the market is known as: (a)   pricing.

The government would likely block a merger if the merger would

• bring two large companies together.

• decrease prices too much.

• lead to unfair market control.

• generate greater efficiencies.

Which of the following effects of an industry’s deregulation would show that it had failed to achieve its objective?

• Several large companies have gone bankrupt.

• Several large companies have merged.

• Market prices have risen significantly.

• The industry has expanded wildly.

Which of the following are ways deregulation impacts an industry? Check all that apply.

• Cut regulations and reduce competition.

• Eliminates price controls, which allows prices to fall.

• Removes barriers to entry, which allows new firms to enter the market.

• Supports the creation of monopolies.

(a)   laws are statutes developed to protect consumers from rapacious business practices by making it illegal for businesses to compete in unfair ways.

Why might the government institute a price control?

• to allow monopolies to exist.

• to raise the prices of all goods.

• to help curb inflation and create balance in the marketplace.

• to favor businesses they support.

Which statement describes the impact of declining wages?

• No impact occurs

• Businesses begin manufacturing more goods

• Government can expect revenue to remain the same

• Individuals demand fewer goods and services

What is one way that government regulation can encourage competition?

• By protecting consumers from dangerous products.

• By investigating charges of discrimination in employment.

• By administering laws forbidding price-fixing and unfair advertising.

• By passing zoning laws limiting certain types of property use

In a mixed market economy, which of these would MOST likely be considered a basic function of government?

• to promote monopolies

• to correct market failures and redistribute income

• to regulate who can purchase services

• to ensure the financial stability of all citizens

In a monopoly, customers will pay a higher price because there are no alternative products to those of the supplier.

• True

• False