When Interstate Bakeries Tried to Buy the Maker of Wonder

question 18

Multiple Choice

When Interstate Bakeries tried to buy the maker of Wonder Bread,

• A) the government concluded that the merger would not significantly affect the price of bread.
• B) the two brands of bread were determined to be close substitutes.
• C) the Federal Trade Commission believed that the merger was a good idea because the combined firm would face lower costs and the cost savings could be passed to consumers in the form of lower prices.
• D) the government concluded that the merger would reduce tax receipts paid to state governments, and therefore blocked the merger attempt.

---

Definitions:

Normal Curve

A symmetrical, bell-shaped curve that represents the distribution of many types of data where most values cluster around a central mean.

Normal Distribution

A type of statistical distribution where data forms a symmetrical bell-shaped curve, with most values clustering around a central mean value.

Illusory Correlation

The cognitive mistake of perceiving a relationship between two variables even when none exists, often leading to erroneous conclusions or stereotypes.

Negative Correlation

A statistical relationship between two variables in which one variable increases as the other decreases.