The United States Bans Most Efforts to Create a Monopoly

question 96

Multiple Choice

The United States bans most efforts to create a monopoly when:

• A) the potential monopoly is a natural monopoly.
• B) two firms combine and become twice as large as each of the remaining 200-300 firms.
• C) efforts to form a monopoly "unfairly" drive out competitors.
• D) output exceeds the efficient level.

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Definitions:

Federal Trade Commission

A U.S. federal agency tasked with protecting consumers and ensuring a strong competitive market by preventing anticompetitive, deceptive, and unfair business practices.

Friendly Merger

A merger transaction agreed upon and conducted in a cooperative manner by all involved parties, typically with shared strategic goals.

Friendly Consolidation

A type of corporate merger or acquisition that is agreed upon and pursued with the cooperation of both the target and acquiring companies.

Agreement in Principle

A preliminary agreement outlining the basic terms and conditions under which an investment will be made, pending further negotiations and due diligence.