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Principles of Microeconomics

7th Edition
N. Gregory Mankiw
ISBN: 9781305156050

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BuyFindarrow_forward

Principles of Microeconomics

7th Edition
N. Gregory Mankiw
ISBN: 9781305156050
Textbook Problem

The antitrust laws aim to

a. facilitate cooperation among firms in oligopolistic industries.

b. encourage mergers to take advantage of economies of scale.

c. discourage firms from moving production facilities overseas.

d. prevent firms from acting in ways that reduce competition.

To determine
Aim of anti-trust law.

Explanation

Option (d):

The aim of the anti-trust law is to prevent the firm from acting in ways that reduce competition. That is, it helps to prevent the emergence of monopolies in the market. The active intervention of anti-trust law makes the market more competitive. Thus, the option “d” is correct.

Option (a):

The anti-trust laws aim to facilitate cooperation among firms in oligopolistic industries. But it keeps the oligopolist to acting together to reduce the monopoly market power...

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