Question 1

What is Market Power?

Accepted Answer

The ability to control prices and total output

Answer

The ability to advertise products

Answer

The ability to produce goods at low cost

Answer

The ability to hire more workers

Question 2

What is the main goal of Antitrust Laws?

Accepted Answer

To prevent firms from coordinating prices and production

Answer

To increase taxes on businesses

Answer

To help firms make more profit

Answer

To support monopolies

Question 3

What is a merger?

Accepted Answer

When two or more companies join to form one firm

Answer

When a company leaves the market

Answer

When the government breaks up a monopoly

Answer

When a company lowers its prices

Question 4

What is Deregulation?

Accepted Answer

The government removes regulations to encourage competition

Answer

The government creates new monopolies

Answer

The government controls all prices

Answer

The government increases taxes

Question 5

Which of the following is a measure used in Deregulation?

Accepted Answer

Removing barriers to entry

Answer

Breaking up small businesses

Answer

Creating more regulations

Answer

Increasing price ceilings

Question 6

What is Predatory Pricing?

Accepted Answer

Selling a product below cost for a short period to drive competitors out

Answer

Selling products at a high price to increase profits

Answer

Selling products at the same price as competitors

Answer

Selling products only during economic crises

Question 7

Why does the government regulate monopolies and oligopolies?

Accepted Answer

Because they have market power and can control prices and output

Answer

Because they always lower prices

Answer

Because they avoid advertising

Answer

Because they produce too many goods

Question 8

A firm might try to increase its market power inorder to _____________

Accepted Answer

Charge higher prices for the goods it produces.

Answer

Expand market accessibility.

Answer

Reduce production costs.

Answer

Improve product quality.

Question 9

The government would likely block a merger if the merger would_______________

Accepted Answer

Lead to unfair market control.

Answer

Encourage innovation and growth.

Answer

Increase consumer choice.

Answer

Stabilize market prices.

Question 10

Why does the government intervene in markets?

Accepted Answer

To promote competition and keep prices low for consumers

Answer

To reduce consumer choice and encourage monopolies

Answer

To increase market volatility and raise prices for consumers

Answer

To limit competition and support higher corporate profits

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