Which of the Following Is Not True Regarding Monopoly Power

question 1

Multiple Choice

Which of the following is not true regarding monopoly power as it relates to acquisitions that reduce competition?

• A) The U.S. Justice Department may challenge a merger if it is not determined to benefit society.
• B) Empirical evidence suggests that increased monopoly power is a significant reason for firms to consider merging.
• C) If monopoly power is measured through an acquisition, all firms in an industry should benefit as the industry's price is increased.
• D) Empirical evidence finds no consistent tendency for share prices of rival firms to rise.

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Definitions:

American Price Level

The average of current prices across the entire spectrum of goods and services produced in the United States.

Aggregate Demand

The cumulative request for goods and services in an economy, gauged at a singular comprehensive price level during a designated time span.

Keynesian Economist

An economist who follows the principles of John Maynard Keynes, advocating for government intervention through fiscal and monetary policies to manage economic cycles.

Recession

A period of economic decline across an economy lasting more than a few months, typically visible in GDP, real income, employment, industrial production.