A successful cruise ship manufacturer begins buying all of the businesses that supply the materials and technology involved in cruise ship manufacturing. As the manufacturer grows in size, it is able to purchase smaller struggling firms until no competition remains. Being the only producer of cruise ships, it is now able to set higher prices with lower quantities supplied than previously existed in a competitive environment.

Question

Which of the following might the government employ to prevent this scenario from happening?

(1 point)
Responses

antitrust law
antitrust law

subsidies
subsidies

taxation
taxation

price floor

Answer 1

The government might employ antitrust law to prevent this scenario from happening. Antitrust laws are designed to promote competition and prevent monopolies by regulating anti-competitive conduct and mergers that may harm competition in the market.