The declared purpose of antitrust policy is to promote competition, yet some would say it actually may prevent competition. Explain the two sides of the debate.
What will be an ideal response?
Antitrust, from the Sherman Act to the Hart-Scott-Rodino Act, penalizes monopolies for anticompetitive behavior. However, firms unable to compete sometimes use antitrust suits as a weapon. Firms that cannot succeed by holding down costs may accuse other firms of predatory pricing or price discrimination, when in fact the rival is simply behaving competitively.
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If M = 200, P = 100, and Q = 10, then V is:
a. 20. b. 2. c. 10. d. 5. e. 2,000.
Refer to the graph shown. An effective price ceiling at Pc causes producer surplus to:
A. fall from areas A + B + E to area A. B. fall from areas C + D + F to area D. C. change from areas C + D + F to areas B + C + D. D. change from areas A + B + E to areas A + B + C.
The rule of reason originated in the __________________ case of 1920.
Fill in the blank(s) with the appropriate word(s).
Refer to the graph above. If the initial equilibrium interest rate was 5 percent and the money supply increased by $100 billion, then the new interest rate would be:
1 percent 2 percent 3 percent 4 percent