Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
By regulating prices to ensure fairness
B
By allowing monopolies to set their own prices
C
By introducing more competition through antitrust laws
D
By providing subsidies to monopolies to lower prices
Understanding the Answer
Let's break down why this is correct
Answer
Government intervention can effectively address monopolies in a free market by creating rules and regulations that promote competition. When one company has too much control over a market, it can charge high prices and limit choices for consumers. By enforcing antitrust laws, the government can break up monopolies or prevent companies from merging in ways that would reduce competition. For example, if a big company tries to buy a smaller competitor to eliminate competition, the government can step in to stop the merger. This helps ensure that consumers have access to fair prices and various products, which is essential for a healthy economy.
Detailed Explanation
Introducing more competition helps break up monopolies. Other options are incorrect because Some think regulating prices makes things fair; Allowing monopolies to set their own prices seems easy.
Key Concepts
Market Failures
Government Intervention
Monopolies
Topic
Market Failures and Government Role
Difficulty
hard level question
Cognitive Level
understand
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