Question 1

The information below sets out the estimated market shares for the cellular phone manufacturing market.

Plus 8 more firms with 1% each
Based on this information, the four-firm concentration ratio is

Accepted Answer

A)   70
B)   68
C)   65
D)   73E) A) and B)
F) B) and C)

Question 2

Which of the following has become a common condition for allowing a merger of large firms?

Accepted Answer

A)   commitment to operate in a market-oriented economy
B)   commitment to open a new factory
C)   commitment to sell off certain parts of the firms
D)   commitment to hire more workersE) A) and C)
F) C) and D)

Question 3

Since the Margaret Thatcher era of the 1970s, many countries have sold off vast numbers of government-owned firms to _______.

Accepted Answer

A)   private monopolies
B)   private ownership
C)   decrease regulation capture
D)   increase outputE) A) and B)
F) All of the above

Question 4

Regulations that permit a regulated firm to cover its costs and to make a normal level of profit are commonly referred to as

Accepted Answer

A)   cost-plus regulation.
B)   price cap regulations.
C)   regulatory capture.
D)   profit regulation.E) A) and B)
F) B) and C)

Question 5

City Gas is a natural monopoly that supplies natural gas to a particular city. Its cost and demand information are given below.

If the government decides to regulate this natural monopoly by forcing them to produce at the point where the demand curve intersects average cost, then compared to the unregulated natural monopoly, the price will _______ and the quantity will _______.

Accepted Answer

A)   rise, rise
B)   rise, fall
C)   fall, rise
D)   fall, fallE) A) and B)
F) B) and D)

Question 6

Briefly discuss the background of laws and regulations all market-based economies operate against.

Accepted Answer

All market-based economies ope...

Question 7

Government passed the _______ to limit the power of large, consolidated firms that were run by trustees as if they were a single firm.

Accepted Answer

A)   Sherman Act in 1890
B)   Thatcher Act in 1980
C)   Antitrust Act in 1890
D)   Competition Act in 1980E) None of the above
F) A) and C)

Question 8

List the various types of U.S. government competition policies relating to market competition and public policy.

Accepted Answer

The government competition policies disc...

Question 9

The statistical models currently used by competition regulators do require some degree of
_______, and can become the subject of _______ authorities and the companies that wish to merge.

Accepted Answer

A)   objective judgment; legal disputes
B)   subjective judgment; legal disputes
C)   subjective judgment; expertise
D)   objective judgment; expertiseE) A) and B)
F) None of the above

Question 10

Why would a competition regulator need details relating to how firms are competing to cut prices, raise output levels, or build a high quality reputation?

Accepted Answer

A)   to be able to determine and specify how competition occurs in an industry
B)   to build a statistical model to estimate the likely outcome of a merger
C)   to block mergers that would reduce competition and harm consumers
D)   to permit competitive mergers to proceed, as well as all of the aboveE) None of the above
F) A) and B)

Question 11

If the largest four firms in an industry control less than half the market, their competitive concentration ratio

Accepted Answer

A)   would be considered to be especially high.
B)   would not be considered particularly high
C)   would not be considered particularly low.
D)   would be considered to be especially low.E) B) and C)
F) A) and D)

Question 12

The main challenge for antitrust regulators is

Accepted Answer

A)   to figure out how to best benefit consumers.
B)   to facilitate privatization of government assets.
C)   to promote the concept of a market-oriented economy.
D)   to determine when a merger may hinder competition.E) B) and D)
F) B) and C) D

Question 13

In competitive settings, profits will lead firms to _______
And losses will lead 
Firms _______, so the incentives for producing at low cost and coming up with new ways of pleasing customers are strong.

Accepted Answer

A)   privatize; nationalize
B)   enter the market; to exit
C)   monopolize; to lower costs
D)   reduce output; increase priceE) None of the above
F) A) and B)

Question 14

The most famous restrictive practices case of the last several decades involved a series of lawsuits by the U.S. government against Microsoft. These particular lawsuits were encouraged by

Accepted Answer

A)   all of Microsoft's competitors.
B)   U.S. consumers.
C)   some of Microsoft's competitors.
D)   U.S. antitrust regulators.E) A) and D)
F) All of the above

Question 15

In the 1980s, the FTC followed guidelines stipulating that, should a proposed merger result in an HHI between 1,000 and 1,800, then it would

Accepted Answer

A)   make a case-by-case decision on the proposal.
B)   probably challenge the proposal.
C)   probably approve the proposal.
D)   scrutinize the proposal prior to doing a above.E) B) and C)
F) All of the above

Question 16

A local regulator has calculated the average cost of production for the public water utility. The regulator has allowed an adjustment for the normal rate of profit the firm should expect to earn, and then set the price that consumers can be charged accordingly. In this instance, the regulator has used which of the following?

Accepted Answer

A)   cost-plus regulation
B)   cost-plus analysis
C)   price-cap regulation
D)   market-price analysisE) A) and B)
F) All of the above A

Question 17

A manufacturer that only allows a consumer to purchase one product if they also buy another product is using _______ to increase its profits.

Accepted Answer

A)   exclusive dealing
B)   tie-in sales
C)   predatory pricing
D)   bundle dealingE) C) and D)
F) A) and B)

Question 18

In the US, which of the following has likely been the most influential with respect to the increased level of competition faced by many local retail businesses?

Accepted Answer

A)   vast improvement in communications technologies
B)   development of the Internet
C)   global business-to business websites
D)   globalization and all of the aboveE) A) and C)
F) A) and B)

Question 19

Which of the following typically leads to two formerly separate firms being under common ownership?

Accepted Answer

A)   government regulation
B)   business mergers
C)   business acquisitions
D)   mergers and acquisitionsE) B) and C)
F) None of the above

Question 20

Which of the following would a market competition regulator be most likely to assign the maximum HHI valuation to?

Accepted Answer

A)   a perfect competitor
B)   a monopoly
C)   an oligopoly
D)   a monopolistic competitorE) All of the above
F) A) and D) B

Exam 11: Monopoly and Antitrust Policy

The information below sets out the estimated market shares for the cellular phone manufacturing market. Plus 8 more firms with 1% each Based on this information, the four-firm concentration ratio is

Correct Answer
verified

Which of the following has become a common condition for allowing a merger of large firms?

Correct Answer
verified

Since the Margaret Thatcher era of the 1970s, many countries have sold off vast numbers of government-owned firms to _______.

Correct Answer
verified

Regulations that permit a regulated firm to cover its costs and to make a normal level of profit are commonly referred to as

Correct Answer
verified

Correct Answer
verified

Briefly discuss the background of laws and regulations all market-based economies operate against.

Correct Answer
verified
All market-based economies ope...
View Answer

Government passed the _______ to limit the power of large, consolidated firms that were run by trustees as if they were a single firm.

Correct Answer
verified

List the various types of U.S. government competition policies relating to market competition and public policy.

Correct Answer
verified
The government competition policies disc...
View Answer

The statistical models currently used by competition regulators do require some degree of _, and can become the subject of _ authorities and the companies that wish to merge.

Correct Answer
verified

Why would a competition regulator need details relating to how firms are competing to cut prices, raise output levels, or build a high quality reputation?

Correct Answer
verified

If the largest four firms in an industry control less than half the market, their competitive concentration ratio

Correct Answer
verified

The main challenge for antitrust regulators is

Correct Answer
verified
D

In competitive settings, profits will lead firms to _ And losses will lead Firms _, so the incentives for producing at low cost and coming up with new ways of pleasing customers are strong.

Correct Answer
verified

The most famous restrictive practices case of the last several decades involved a series of lawsuits by the U.S. government against Microsoft. These particular lawsuits were encouraged by

Correct Answer
verified

In the 1980s, the FTC followed guidelines stipulating that, should a proposed merger result in an HHI between 1,000 and 1,800, then it would

Correct Answer
verified

Correct Answer
verified
A

A manufacturer that only allows a consumer to purchase one product if they also buy another product is using _______ to increase its profits.

Correct Answer
verified

In the US, which of the following has likely been the most influential with respect to the increased level of competition faced by many local retail businesses?

Correct Answer
verified

Which of the following typically leads to two formerly separate firms being under common ownership?

Correct Answer
verified

Which of the following would a market competition regulator be most likely to assign the maximum HHI valuation to?

Correct Answer
verified
B

Exam 11: Monopoly and Antitrust Policy

The information below sets out the estimated market shares for the cellular phone manufacturing market. Plus 8 more firms with 1% each Based on this information, the four-firm concentration ratio is

Correct AnswerverifiedShow Answer

Which of the following has become a common condition for allowing a merger of large firms?

Correct AnswerverifiedShow Answer

Since the Margaret Thatcher era of the 1970s, many countries have sold off vast numbers of government-owned firms to _______.

Correct AnswerverifiedShow Answer

Regulations that permit a regulated firm to cover its costs and to make a normal level of profit are commonly referred to as

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Briefly discuss the background of laws and regulations all market-based economies operate against.

Correct AnswerverifiedAll market-based economies ope...View AnswerShow Answer

Government passed the _______ to limit the power of large, consolidated firms that were run by trustees as if they were a single firm.

Correct AnswerverifiedShow Answer

List the various types of U.S. government competition policies relating to market competition and public policy.

Correct AnswerverifiedThe government competition policies disc...View AnswerShow Answer

The statistical models currently used by competition regulators do require some degree of _______, and can become the subject of _______ authorities and the companies that wish to merge.

Correct AnswerverifiedShow Answer

Why would a competition regulator need details relating to how firms are competing to cut prices, raise output levels, or build a high quality reputation?

Correct AnswerverifiedShow Answer

If the largest four firms in an industry control less than half the market, their competitive concentration ratio

Correct AnswerverifiedShow Answer

The main challenge for antitrust regulators is

Correct AnswerverifiedD

In competitive settings, profits will lead firms to _______ And losses will lead Firms _______, so the incentives for producing at low cost and coming up with new ways of pleasing customers are strong.

Correct AnswerverifiedShow Answer

The most famous restrictive practices case of the last several decades involved a series of lawsuits by the U.S. government against Microsoft. These particular lawsuits were encouraged by

Correct AnswerverifiedShow Answer

In the 1980s, the FTC followed guidelines stipulating that, should a proposed merger result in an HHI between 1,000 and 1,800, then it would

Correct AnswerverifiedShow Answer

Correct AnswerverifiedA

A manufacturer that only allows a consumer to purchase one product if they also buy another product is using _______ to increase its profits.

Correct AnswerverifiedShow Answer

In the US, which of the following has likely been the most influential with respect to the increased level of competition faced by many local retail businesses?

Correct AnswerverifiedShow Answer

Which of the following typically leads to two formerly separate firms being under common ownership?

Correct AnswerverifiedShow Answer

Which of the following would a market competition regulator be most likely to assign the maximum HHI valuation to?

Correct AnswerverifiedB

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All market-based economies ope...
View Answer

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The government competition policies disc...
View Answer

The statistical models currently used by competition regulators do require some degree of _, and can become the subject of _ authorities and the companies that wish to merge.

Correct Answer
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D

In competitive settings, profits will lead firms to _ And losses will lead Firms _, so the incentives for producing at low cost and coming up with new ways of pleasing customers are strong.

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A

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B