Antitrust policy is designed to
a. improve health and safety in products and in working conditions
b. regulate the firms in industries where cut-throat competition is potentially damaging
c. create monopolies by forcing competitive firms to merge
d. control price and output in industries where monopoly is desirable
e. promote competition and reduce anticompetitive behavior
Question 2
A perfectly competitive firm finds that: Average total cost is 25; Average variable cost is 15; Marginal cost is 20 and increasing; Price of the product is 22. This firm should
a. produce more output
b. raise the price of its product
c. reduce production without shutting down
d. shut down (reduce output to zero)
e. do nothing (it is currently maximizing profit)
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