BA 372 Lesson 7 Assignment 3

BA 372 Lesson 7 Assignment 3 - Ashley B. Hilliard...

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Ashley B. Hilliard 258-10-0169 July 5, 2010-October 22, 2010 BA 372 Lesson#7, Assignment3 1. Why is a monopolist’s marginal revenue less than the price of its good? Can marginal revenue ever be negative? Explain. Because monopolist has to reduce price to sell more. Marginal revenue cannot be negative because the quantity cannot be negative. 2. What gives the government the power to regulate mergers between firms? From the standpoint of the welfare of society, give a good reason and a bad reason that two firms might want to merge. When competitive markets monopolies fail to allocate the resources efficiently policy makers in the government thus can respond to the problem on monopoly in many ways. Like for the regulation of mergers the government gets the power from antitrust laws. The antitrust laws are a collection of statutes aimed at curbing monopoly power. American antitrust laws are state and federal laws created to prevent monopolies. Antitrust laws apply to both businesses and
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BA 372 Lesson 7 Assignment 3 - Ashley B. Hilliard...

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