Monopoly Impacts and Government Interventions
If governments put a price ceiling on patented drugs, what will happen to the production of the drugs?
Production of the drug increases
Production of the drug decreases
Production of the drug may increase or decrease depending on demand
The firm will shut down and stop production.
When the government enforces a price ceiling on a good, which is lower than the current market price, _________.
a perfectly competitive firm produces more
a perfectly competitive firm produces less
a monopoly firm produces more
a monopoly firm produces less
What are the ways in which large firms can hurt the society?
Large firms can set very low prices to drive out the competition
Neither A nor B
If large firms are monopolies, they can charge very high prices from the consumers
Both A and B
- not change
- be stopped
- price regulation
- economies of scale
- anti-trust laws
- key resources