CH21: Anti-trust policies

Question 1

What are anti-trust policy?

Answer 1

laws made to encourage competition and economic efficiency

Question 2

What is industrial regulation?

Answer 2

where government are concerned with price changes and the services provided to the public

Question 3

what is social regulation?

Answer 3

where government are concerned with conditions under which good and services are produced

Question 4

Benefits of antitrust policy:

Answer 4

preventing monopolization
promoting competition
achieving allocative efficiency

Question 5

Structural remedy:

Answer 5

focuses on resolving firm’s illegal monopoly behavior by changing the structure of offending business.

Question 6

Behavioral remedy:

Answer 6

seeks to resolve firms illegal monopoly behaviour by requiring different actions to be taken by the firm

Question 7

Type of mergers:

Answer 7

Horizontal-between 2 firms who produce the same product
Vertical-between 2 firms who are at different stage of production process
Conglomerate- occurs between firms in different industries

Question 8

disadvantages of industrial regulation:

Answer 8

costs and inefficiency
perpetuating monopoly

Question 9

Advantages of social regulation:

Answer 9

reduce workplace injuries
contribute to clean air and water
reduce employment discrimination

Question 10

Disadvantages:

Answer 10

Inadequate information
unintended side effects
overzealous enforcements