In general, horizontal mergers will
A. reduce economic profits in an industry.
B. increase competition in an industry.
C. decrease the number of firms in an industry.
D. increase the number of firms in an industry.
Answer: C
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Rate of return regulation, as currently applied to many natural monopolies such as public utilities,
A) generally involves the use of price caps. B) gives the firms an incentive to inflate their costs. C) gives the firms an incentive to cut their costs as much as possible. D) generally keeps their prices higher than if they were unregulated monopolists.
"I'm tired of eating muffins for breakfast. Today, I'm trying a bagel." These statements most clearly reflect the:
a. law of increasing returns to scale. b. second law of demand. c. law of diminishing marginal utility. d. law of comparative advantage.
The monetary policy weapon least often used by the Fed is ____________.
Fill in the blank(s) with the appropriate word(s).
Economists normally assume that the goal of a firm is to
a. maximize its total revenue. b. maximize its profit. c. minimize its explicit costs. d. minimize its total cost.