The Clayton Act of 1914
a. was too vaguely worded to reduce anticompetitive behavior significantly
b. prohibited conspiracies in restraint of trade
c. prohibited price discrimination that reduces competition and cannot be justified based on cost differences
d. created the Federal Trade Commission
e. prohibited firms from reducing prices too far
Question 2
The entry of new firms into a competitive industry in the long run has the effect of
a. driving up long-run equilibrium price
b. eliminating economic profits
c. reducing equilibrium quantity
d. making the demand curve facing each firm more inelastic
e. shifting the cost curves for each firm by an amount equal to total cost divided by the number of firms
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