If Market Failure from Monopoly Behaviour Is Deemed Small Compared

question 88

Multiple Choice

If market failure from monopoly behaviour is deemed small compared to the inevitable imperfections of policies, policymakers may choose to:

• A)do nothing at all
• B)regulate the prices that the monopoly charges
• C)use competition laws to try to make the industry more competitive
• D)turn the monopolist into a government-run enterprise

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Definitions:

Gain on Sale

Profit realized from the sale of assets or investments when the selling price exceeds the book value.

Net Income

The total profit of a company after all expenses, including taxes and operating costs, have been subtracted from total revenues.

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board that is becoming the global standard for the preparation of public company financial statements.

GAAP

Generally Accepted Accounting Principles, the standard framework of guidelines for financial accounting used in the United States.