Question

6. Network monopolies The value of a network good as the expected number of units sold increases. Which of the following is an accurate description of the current antitrust policy for network monopolies? The authorities would issue a complaint if the network monopoly undertakes predatory practices to maintain its monopoly position. The authorities would issue a complaint against a network monopoly regardless of how the company behaves. The authorities would issue a complaint if the network monopoly raises the price of the network good.

Answer 1

Answer:

The authorities would issue a complaint if the network monopoly undertakes predatory practices to maintain its monopoly position

Explanation:

A monopoly is when there is only one firm operating in an industry.

The antitrust policy ensures the monopoly doesn't abuse its power and to protect consumers.

Predatory pricing is when a business sets its price very low with the intent of chasing out competitors from the market. This violates antitrust policy and as a result authorities would intervene.

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