Public policy responses to monopolies:
A) aim to break up existing monopolies.
B) prevent new monopolies from forming.
C) ease the effect of monopoly power on consumers.
D) All of these statements are true.

Question

Quizplus · Accepted Answer

Public policy responses to monopolies aim to achieve all three objectives listed in the answer choices, i.e., breaking up existing monopolies, preventing the formation of new ones, and easing the harmful effects of monopoly power on consumers. Breaking up existing monopolies often involves antitrust actions, such as divestitures or spinoffs, aimed at increasing competition in the affected markets. Preventing the formation of new monopolies often requires regulatory oversight to keep a check on mergers and acquisitions that could lead to excessive market concentration. Easing the adverse impact of monopoly power on consumers often involves consumer protection measures, such as price controls or quality standards, to ensure that consumers get fair and adequate access to goods and services.

Public Policy Responses to Monopolies