Suppose a Market Is Initially Competitive with Many Firms Selling

question 5

Multiple Choice

Suppose a market is initially competitive with many firms selling an identical product. Over time, however, suppose the merging of firms results in the market being served by only three or four firms selling this same product. As a result, we would expect

• A) an increase in market output and an increase in the price of the product.
• B) an increase in market output and an decrease in the price of the product.
• C) a decrease in market output and an increase in the price of the product.
• D) a decrease in market output and a decrease in the price of the product.

---

Definitions:

Morality

Standards that discern between ethical and unethical actions.

Beneficial Effects

Positive outcomes or advantages that result from a particular action or policy.

Ethical Action

Behavior guided by moral principles, aiming to promote good and avoid harm.

Principle of Utility

A fundamental concept in utilitarian ethics that suggests actions should be judged as right or wrong based on their outcomes, specifically their ability to produce the greatest happiness for the greatest number of people.