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Exam 11: Monopoly and Antitrust Policy

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Question 1

Multiple Choice

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The main challenge for antitrust regulators is

A) to figure out how to best benefit consumers.
B) to facilitate privatization of government assets.
C) to promote the concept of a market-oriented economy.
D) to determine when a merger may hinder competition.

E) A) and C)
F) A) and D)

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D

Question 2

Multiple Choice

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City Gas is a natural monopoly that supplies natural gas to a particular city. Its cost and demand information are given below. If the government decides to regulate this natural monopoly by forcing them to produce at the point where the demand curve intersects average cost, then compared to the unregulated natural monopoly, the price will _______ and the quantity will _______.

A) rise, rise
B) rise, fall
C) fall, rise
D) fall, fall

E) All of the above
F) A) and B)

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Question 3

Multiple Choice

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A manufacturer that only allows a consumer to purchase one product if they also buy another product is using _______ to increase its profits.

Since the Margaret Thatcher era of the 1970s, many countries have sold off vast numbers of government-owned firms to _______.

The most famous restrictive practices case of the last several decades involved a series of lawsuits by the U.S. government against Microsoft. These particular lawsuits were encouraged by

Government passed the _______ to limit the power of large, consolidated firms that were run by trustees as if they were a single firm.

Which of the following has become a common condition for allowing a merger of large firms?

The statistical models currently used by competition regulators do require some degree of _______, and can become the subject of _______ authorities and the companies that wish to merge.

Briefly discuss the background of laws and regulations all market-based economies operate against.

List the various types of U.S. government competition policies relating to market competition and public policy.

The information below sets out the estimated market shares for the cellular phone manufacturing market. Plus 8 more firms with 1% each Based on this information, the four-firm concentration ratio is

In the US, which of the following has likely been the most influential with respect to the increased level of competition faced by many local retail businesses?

Which of the following typically leads to two formerly separate firms being under common ownership?

Which of the following would a market competition regulator be most likely to assign the maximum HHI valuation to?

If the largest four firms in an industry control less than half the market, their competitive concentration ratio

Why would a competition regulator need details relating to how firms are competing to cut prices, raise output levels, or build a high quality reputation?

Regulations that permit a regulated firm to cover its costs and to make a normal level of profit are commonly referred to as

In the 1980s, the FTC followed guidelines stipulating that, should a proposed merger result in an HHI between 1,000 and 1,800, then it would

In competitive settings, profits will lead firms to _______ And losses will lead Firms _______, so the incentives for producing at low cost and coming up with new ways of pleasing customers are strong.

A local regulator has calculated the average cost of production for the public water utility. The regulator has allowed an adjustment for the normal rate of profit the firm should expect to earn, and then set the price that consumers can be charged accordingly. In this instance, the regulator has used which of the following?