Question

1. In the 1970s, the U.S. government set the price for gasoline around one dollar per gallon. Define price controls and describe how some people believe they protect competition.
2. The Standard Oil company was found in violation of antitrust law in 1911 and forced to break into 34 separate companies. Define antitrust law and describe how it protects competition.

3. Explain why a market or mixed economy is the best match for the United States.

4. A man named Alexander Graham Bell received a patent for his telephone invention in 1876. Today, many Americans carry a cell phone around with them. Define patent law and describe how patents encourage competition.

Answer 1

1)  In order to keep competitors from increasing or decreasing the prices they may establish, USA in the period of 70s set very democratic price - abut 1 dollar per gasoline so that their offer will be more affordable and attractive.

2)  Antitrust law that is placed in US Constitution includes federal and state laws that belong to the government. Its aim is to organize structure of business and their business ideas is to focuse on promotion of the companies in the way of consumers' needs.


3) The advantage for US in taking mixed economy as a basis is that this system allows producers to produce things they want. But in this case government always regulates what is being sold among the country in order to protect its citizens. What about market, this policy is not as powerful as the previous on, this econimy would not be that suitable as any type of products that may cause harm such as weapon or drugs can be freely,carelessly distributed. 

4) A patent law is a application to obtain protection under U.S. law. If company or inventor does not want to get its ideas or concepts stolen a person or company  appeals to this system to protect his product. Since competitor can't stole the idea it must create something better which poses as an example of encouragement of competition.