Two business owners are discussing the idea of merging their bottled water companies to monopolize the industry in their state. What government intervention in a market economy would prevent this potential merger?

(1 point)
Responses

Monopsony formation

Monopsony formation

Property protection

Property protection

Market regulation

Market regulation

Administrative ease

Administrative ease

1 answer

The correct response is Market regulation.

In a market economy, government intervention through antitrust laws and market regulations is aimed at preventing monopolistic practices and promoting competition. If two companies attempt to merge with the intent to monopolize an industry, regulatory agencies like the Federal Trade Commission (FTC) would likely intervene to assess the merger's impact on market competition and may prevent it to maintain a healthy market environment.