Question 1

One possible benefit from a merger is that the new firm could consolidate production,marketing,and a administrative operations,leading to lower the production average costs.

Accepted Answer

A) True 
 B)False

Question 2

-Refer to Figure 13.3.What price-output combination would result for the natural monopoly if it was unregulated? What price-output combination would result if the government regulated the natural monopoly using average-cost pricing? How would profit differ in each situation?

Accepted Answer

The answer of 
-Refer to Figure 13.3.What price-output combination would...

Question 3

A pricing scheme under which a firm decreases its price in order to drive its rival out of business is known as

Accepted Answer

A)  tie-in sales. 
B)  colluding. 
C)  predatory pricing. 
D)  bundling.

Question 4

The Federal Trade Commission blocked the merger between Office Depot and Staples because there was evidence that the merger would increase competition in the office supplies industry.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following industries is a good example of a natural monopoly?

Accepted Answer

A)  water systems 
B)  operating system software 
C)  military equipment sold to the federal government 
D)  none of the above

Question 6

The Sherman Act

Accepted Answer

A)  enhanced firms' ability to enforce cartel agreements. 
B)  made it illegal to engage in practices that result in a restraint of trade. 
C)  was passed to encourage judicial leniency in the review of cooperative agreements. 
D)  was passed to clarify the Clayton Act.

Question 7

Recall the Application about the 1998 merger between Pennzoil and Quaker State to answer the following question(s). The merger resulted in a company with a market share of 38 percent: 29 percent from Pennzoil and 9 percent from Quaker State.
-Recall the Application.What happened to the prices of their products when the merger occurred?

Accepted Answer

A)  Pennzoil raised its product prices. 
B)  Quaker State raised its product prices. 
C)  Pennzoil decreased its product prices. 
D)  Quaker decreased its product prices.

Question 8

The government's policies regarding anti-competitive actions are called industrial policy.

Accepted Answer

A) True 
 B)False

Question 9

Define a natural monopoly.

Accepted Answer

The answer of Define a natural monopoly....

Question 10

Name three industries in which the government has broken up a monopoly.

Accepted Answer

The answer of Name three industries in which the government...

Question 11

Describe the Hart-Scott-Rodino Act.

Accepted Answer

The answer of Describe the Hart-Scott-Rodino Act....

Question 12

Which government agency was created in 1914 to enforce antitrust laws?

Accepted Answer

A)  the Department of Justice 
B)  the Federal Reserve System 
C)  the Financial Regulatory Committee 
D)  the Federal Trade Commission

Question 13

The Consumer Protection Agency is responsible for initiating actions against individuals or firms suspected of anti-competitive behavior.

Accepted Answer

A) True 
 B)False

Question 14

Under an average-cost pricing policy,the government picks the price at which the market demand curve intersects the monopolist's long-run average-cost curve.

Accepted Answer

A) True 
 B)False

Question 15

Recall the Application about the merger of Office Depot and Office Max to answer the following question(s).
-Recall the Application.In 2013,________ approved the merger of Office Depot and Office Max.

Accepted Answer

A)  the Federal Trade Commission 
B)  the Commerce Department 
C)  the Supreme Court 
D)  the World Bank

Question 16

To maximize profit,a natural monopolist will produce at a point where marginal revenue is equal to marginal cost.

Accepted Answer

A) True 
 B)False

Question 17

If a natural monopoly is allowed to choose the profit-maximizing price,it will most likely be lower than if it is regulated.

Accepted Answer

A) True 
 B)False

Question 18

If Xerox requires individuals who purchase their copiers to also purchase Xerox toner fluid,then Xerox is engaging in the practice of predatory pricing.

Accepted Answer

A) True 
 B)False

Question 19

When Staples and Office Depot attempted to merge in 1997,

Accepted Answer

A)  the Federal Trade Commission convinced the courts to block the merger on the grounds that the merger would lead to less competition in the office supplies industry. 
B)  it was determined that Office Depot and Staples were not substitutes for each other. 
C)  the Federal Trade Commission believed that the merger would increase the competitiveness of the office supplies industry. 
D)  evidence showed that the merger would lead to lower prices on office supplies.

Question 20

Describe the Office Depot/Staples case.

Accepted Answer

The answer of Describe the Office Depot/Staples case....

Exam 13: Controlling Market Power: Antitrust and Regulation

One possible benefit from a merger is that the new firm could consolidate production,marketing,and a administrative operations,leading to lower the production average costs.

-Refer to Figure 13.3.What price-output combination would result for the natural monopoly if it was unregulated? What price-output combination would result if the government regulated the natural monopoly using average-cost pricing? How would profit differ in each situation?

A pricing scheme under which a firm decreases its price in order to drive its rival out of business is known as

The Federal Trade Commission blocked the merger between Office Depot and Staples because there was evidence that the merger would increase competition in the office supplies industry.

Which of the following industries is a good example of a natural monopoly?

The Sherman Act

The government's policies regarding anti-competitive actions are called industrial policy.

Define a natural monopoly.

Name three industries in which the government has broken up a monopoly.

Describe the Hart-Scott-Rodino Act.

Which government agency was created in 1914 to enforce antitrust laws?

The Consumer Protection Agency is responsible for initiating actions against individuals or firms suspected of anti-competitive behavior.

Under an average-cost pricing policy,the government picks the price at which the market demand curve intersects the monopolist's long-run average-cost curve.

Recall the Application about the merger of Office Depot and Office Max to answer the following question(s) . -Recall the Application.In 2013,________ approved the merger of Office Depot and Office Max.

To maximize profit,a natural monopolist will produce at a point where marginal revenue is equal to marginal cost.

If a natural monopoly is allowed to choose the profit-maximizing price,it will most likely be lower than if it is regulated.

If Xerox requires individuals who purchase their copiers to also purchase Xerox toner fluid,then Xerox is engaging in the practice of predatory pricing.

When Staples and Office Depot attempted to merge in 1997,

Describe the Office Depot/Staples case.