📚 Learning Guide
Sherman Antitrust Act Application
easy

The Sherman Antitrust Act was primarily designed to protect small businesses by preventing monopolies from forming, ensuring fair competition in the market.

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A

True

B

False

Understanding the Answer

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Answer

The Sherman Antitrust Act was passed in 1890 to stop companies from gaining too much power in a market, which could hurt other businesses, especially small ones, by making it hard for them to compete. It does this by making it illegal for firms to agree on prices, limit production, or divide markets, actions that would create a monopoly or a cartel. When a monopoly forms, it can raise prices or cut quality, forcing small competitors out of business and limiting choices for consumers. For example, if a large grocery chain tried to buy every supplier and then set prices so high that local stores could not afford stock, the Act would prohibit that, allowing smaller stores to stay open and compete. Thus, the law protects both small businesses and consumers by keeping markets open and fair.

Detailed Explanation

The Act is aimed at stopping large companies from monopolizing the market. Other options are incorrect because People think the law was made only to help small businesses, but it actually stops any large firm from hurting the whole economy.

Key Concepts

Sherman Antitrust Act
Monopolies and Trusts
Regulation of Businesses
Topic

Sherman Antitrust Act Application

Difficulty

easy level question

Cognitive Level

understand

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