54. In 1984, the Department of Justice reached an agreement with AT&T that: A) b

Question

54. In 1984, the Department of Justice reached an agreement with AT&T that:
A) broke down most of the barriers to entry into the telecommunications industry.
B) allowed the so-called Baby Bells to continue to have significant monopoly power in the local service areas.
C) merged the regional Bell operating companies into a single firm so that they could compete directly with AT&T.
D) led to significant degrees of competition and the reduction of monopoly power in local markets with most of the change coming within 10 years after the agreement.

Explanation / Answer

In 1984, the Department of Justice reached an agreement with AT&T that: A) broke down most of the barriers to entry into the telecommunications industry. AT&T was a monopoly and they created barriers to entry to prevent other telecom companies from entering the market. When the Dept. of Justice stepped in, this barrier was removed, and this became a competitive market driving prices down.

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