Which of the following statements is true?
a. A vertical merger is a merger of firms that compete in the same market.
b. The rule of reason doctrine declares that the existence of monopoly alone is illegal.
c. Government regulation is economically justifiable for a natural monopoly.
d. Deficient information on unsafe products causes underconsumption.
c
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Public finance is the subdiscipline of economics that studies the various ways in which
A. governments may regulate and promote the stability of the financial sector. B. firms in the financial sector provide services to households and firms. C. governments raise and expend money. D. the general public acquires financing for their purchases.
Which of the following is the best example of an action that imposes an external cost?
a. Wear and tear on your car as the result of frequent use. b. Deterioration in the average quality of a house you own as the result of poor maintenance. c. Water pollution from an upstream factory that increases the cost of providing clean water to downstream residents. d. A rose garden on your property from which your neighbor gets much enjoyment.
By restricting the amount of a good that may be imported, quotas:
a. increase the price, thus causing domestic producers to sell less than they would with free trade. b. lower the price, thus allowing domestic producers to sell more than they would with free trade. c. increase the price and allow domestic producers to sell more at a higher price than they would with free trade. d. lower the price, thus causing domestic producers to realize lower total revenue from the quota item. e. simply replace foreign production with domestic production.
For poor countries, a lack of capital and poorly developed infrastructure contribute to low farm productivity.
Answer the following statement true (T) or false (F)