In July 2008, the Federal Communications Commission approved the ...

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In July 2008, the Federal Communications Commission approved the merger of satellite radio providers XM Satellite and Sirius Satellite Radio, establishing a single satellite radio company in America. The deal is tough for many to swallow.
 
  We continue to believe that consumers are best served by competition rather than monopolies, said National Association of Broadcasters Vice President Dennis Wharton. What does Wharton argue? A) Producer surplus is greater with competition.
  B) Total surplus is greater with a monopoly.
  C) Consumer surplus is greater with competition.
  D) Prices are lower with a monopoly.

Question 2

In July 2008, the Federal Communications Commission approved the merger of satellite radio providers XM Satellite and Sirius Satellite Radio, establishing a single satellite radio company in America.
 
  Under the terms of the deal, the companies agreed not to raise prices for the next three years. Why would the FTC require prices not to increase for three years? A) Compared to competition, monopolies are always worse for consumers.
  B) Compared to competition, monopolies restrict output and charge higher prices.
  C) Compared to competition, monopolies increase prices and output.
  D) Compared to competition, monopolies restrict output and charge lower prices.

[ankilker]

Answer to Question 1

C

Answer to Question 2

B

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TYSM

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Excellent