The purpose of anti-trust laws (also known as competition laws) is to
A) Ensure prices are the same for all consumers
B) regulate the prices charged by a monopoly.
C) increase merger activity to help generate synergies that reduce costs and raise efficiency.
D) create public ownership of natural monopolies.
E) increase competition in an industry by preventing mergers and breaking up large firms.

Question

Quizplus · Accepted Answer

The purpose of anti-trust laws is to increase competition in an industry by preventing mergers and breaking up large firms. This helps to prevent monopolies and create a more level playing field for businesses, which can ultimately benefit consumers. Option A is incorrect as anti-trust laws do not ensure that prices are the same for all consumers, but rather encourage competition to promote fair pricing. Option B is partially correct, as anti-trust laws can regulate the prices charged by a monopoly, but this is not the sole purpose. Option C is incorrect as anti-trust laws do not aim to increase merger activity. Option D is also incorrect as anti-trust laws do not aim to create public ownership of natural monopolies.

The Purpose of Anti-Trust Laws (Also Known as Competition Laws)