1. The field of law that attempts to limit the ability of oligopolists to collud
ID: 1213129 • Letter: 1
Question
1. The field of law that attempts to limit the ability of oligopolists to collude and restrict competition is called:
antitrust policy.
product safety policy.
fuel efficiency standards.
excise tax policy.
2.
Monopolistic firm's demand curve is:
above the marginal revenue curve.
below the marginal revenue curve.
horizontal because of economics of scale.
infinitely elastic.
3.
A monopoly, in cotrast to a perfectly competitive firm:
produces more at a lower price.
produces where MR > MC.
may have lower economic profits in the long run.
produces less at a higher price.
above the marginal revenue curve.
below the marginal revenue curve.
horizontal because of economics of scale.
infinitely elastic.
3.
A monopoly, in cotrast to a perfectly competitive firm:
produces more at a lower price.
produces where MR > MC.
may have lower economic profits in the long run.
produces less at a higher price.
Explanation / Answer
Ans1) Antitrust Policy: antitrust provisions are designed to maximize consumer welfare. Anti trust law attempts to limit the ability of oligopolists to collude and restrict competition
Ans2) a monopolistic firm's demand curve lies above the MR curve. Because the monopolistically competitive firm's product is differentiated from other products, the firm will face its own downwardsloping market demand curve, that would lie above the MR curve.
Ans3) A monopoly in contrast to perfect Competition, will produce less at a higher price. The price charged by a monopoly is higher than the marginal cost of production, which violates the efficiency condition that price equals MC.
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