Which of the Following Is the Preferred Strategy for the Government

question 308

Multiple Choice

Which of the following is the preferred strategy for the government to follow to remedy the inefficient allocation of resources associated with monopolies?

• A)preventing mergers through antitrust laws
• B)regulating the prices that monopolies can charge
• C)doing nothing
• D)None of the above strategies is preferred. Each is a viable strategy.

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Definitions:

Quantity of Resources

The total amount of inputs available for the production process, including labor, capital, land, and raw materials.

Price-Taker Market

A market situation in which individual buyers or sellers have no influence on the price of a product, often due to the product being completely standardized and numerous participants.

Tea Industry

The sector of the economy devoted to the production, processing, and marketing of tea.