Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
By deregulating the market completely
B
By breaking up the monopoly or regulating its prices
C
By encouraging more monopolies to form
D
By allowing monopolies to operate without any restrictions
Understanding the Answer
Let's break down why this is correct
Answer
Government intervention addresses monopoly power by implementing regulations to promote competition and protect consumers. When one company controls a market, it can set high prices and limit choices for customers, which is unfair. To prevent this, governments may create laws that stop monopolistic practices, such as price-fixing or unfair mergers. For example, if a large company tries to buy a smaller competitor to eliminate competition, the government might block the merger to keep the market open for other businesses. This way, consumers benefit from more choices and fairer prices, helping to create a healthier economy.
Detailed Explanation
Governments can break up monopolies or control their prices. Other options are incorrect because Some might think that removing all rules helps the market; People might believe that more monopolies are good for business.
Key Concepts
monopoly power
government intervention
Topic
Market Failures and Government Role
Difficulty
medium level question
Cognitive Level
understand
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