Four firms agree to operate as a monopoly and charge the monopoly price of $15 for their product and (jointly)produce the monopoly quantity of 25,000 units. If the competitive price for the product is $8, under the Clayton Act these four firms face treble damages of_______ .
A)$525,000
B)$175,000
C)$3,000,000
D)$1,000,000

Question

Quizplus · Accepted Answer

The damages are calculated as the difference between the monopoly price and the competitive price ($15 - $8 = $7) multiplied by the quantity (25,000 units), resulting in $175,000. Treble damages mean this amount is tripled, leading to $525,000.

Four Firms Agree to Operate as a Monopoly and Charge