Question

Antitrust laws have economic benefits that outweigh the costs if they a. prevent mergers that would decrease competition and lower the costs of production. b. prevent mergers that would decrease competition and raise the costs of production. c. allow mergers that would decrease competition and raise the costs of production. d. None of the above is correct because antitrust laws never have economic benefits that outweigh the costs.

Answer 1

Answer:

b. prevent mergers that would decrease competition and raise the costs of production

Explanation:

Antitrust laws are set up to prevent unfair advantage by a firm or group of firms in the market. The main aim is to provide a level playing field for all forms in a particular industry.

This is done by increasing competition among the firms and reducing cost of production.

Cost reduction help new firms to enter the market easily.

So antitrust laws have economic benefits when they prevent mergers that would decrease competition and raise the costs of production.