Explanation: E) Perfect competition occurs when there are many buyers and sellers of products that are virtually identical and any seller can easily enter and exit the market. When these conditions exist, no single supplier can influence the price.

Question

A) to ensure that there are as many opportunities for perfect competition as possible
B) to ensure that no single seller can drastically increase the price of a given product or service
C) to ensure that no one industry has control of the entire national economy
D) to ensure that local businesses are always the preferred provider of products consumers want
E) to ensure that companies have equal access to natural resources like water and natural gas

Answer 1

B) to ensure that no single seller can drastically increase the price of a given product or service

Explanation: B) Formation of monopolies is regulated so that a potential monopolistic supplier can not charge an excessive price or be unresponsive to consumer needs. In the United States, as well as in other countries, large monopolies are rarely allowed. Natural monopolies are an exception. Utility companies, such as those that sell natural gas or water to consumers, may be permitted to hold monopolies in an effort to conserve natural resources.