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Linda_us
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6.The main purpose of the antitrust laws is Answer to

Customer Question

6.The main purpose of the antitrust laws is:
Answer
to encourage firms to produce where P > MC.
the elimination of both negative and positive externalities.
to prevent the monopolization of industries.
to regulate natural monopolies.

7.Suppose the firms in a five-firm industry have market shares of 30, 30, 20, 10, and 10 percent, respectively. The Herfindahl index for the industry is:
Answer
1,900.
2,400.
90.
10,000.

8.Suppose that two firms in an industry with a Herfindahl index of 5,000 announce a merger. The U.S. Justice Department concludes the merger will boost the index to 5,500. The antitrust authorities will most likely:
Answer
ignore this merger because of the relatively small increase in the Herfindahl index.
allow the merger but watch the new firm carefully for future violations of the antitrust laws.
allow the merger if foreign entry to the industry is possible.
prevent the merger, contending that it violates the Clayton Act.

9.The legal cartel theory indicates that, in any industry where market demand and the long-run average total cost curve intersect close to the latter's minimum, government regulation is mandatory and desirable.
Answer True
False

10.A function of the Federal Trade Commission is to:
Answer
investigate instances of faulty and misleading advertising.
establish railway rates for interstate railroads.
ban or recall unsafe consumer products.
prevent insider trading in securities markets.
Submitted: 5 years ago.
Category: Homework
Expert:  Linda_us replied 5 years ago.
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