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

Question

A. monopsony formation
B. property protection
C. market regulation
D. administrative ease

Answer 1

The correct answer is C. market regulation.

Government intervention through market regulation, particularly antitrust laws, is designed to prevent monopolies and promote competition in the marketplace. These regulations can block mergers that would significantly reduce competition and lead to monopolistic practices, ensuring a fair environment for consumers and other businesses.