Question

Why would the U.S. government seek to limit the development of business monopolies?

a) To guarantee low prices
b) To encourage competition
c) To increase production levels
d) To improve hiring practices

Answer 1

The U.S. government seeks to limit business monopolies to encourage competition, which leads to benefits such as lower prices and innovation. Anti-monopoly policies include blocking anticompetitive mergers and regulations, preserving market competition and preventing market failures.

Step-by-step explanation:

The U.S. government seeks to limit the development of business monopolies to encourage competition. This is essential because competition in the marketplace leads to multiple benefits, such as lower prices for consumers, enhanced quality of goods and services, and innovation. Government policies like blocking anticompetitive mergers, ending restrictive business practices, and imposing regulations on natural monopolies are ways to preserve competition. Additionally, these policies help incentivize companies to improve efficiency and productivity.

Moreover, the enforcement of anti-monopoly legislation also ties into broader economic goals, such as preventing market failures and ensuring that the market economy operates within a framework conducive to public welfare, which includes enforcing contracts, collecting taxes, and protecting health and the environment. Public disclosure plays a role in this framework by making company practices transparent, aiding in preventing deceptive practices that could lead to monopolistic control.