[Solved] Prior to the 1986 Amendments to the Canadian Competition Act,cases

Which of the following is a possible negative result of a policy of average-cost pricing as a method of regulating a natural monopoly? A)economic losses will accumulate over time to unsustainable levels B)taxpayers will have to subsidize the economic losses of the regulated monopoly C)the regulated monopoly earns unreasonable profits D)socially desirable capital investment may not occur E)the induced technological change leads to more industries becoming natural monopolies

There has been a trend toward less government regulation and ownership in oligopolistic industries in most industrialized countries since the 1980s.One reason for this is A)policymakers came to understand that many oligopolistic firms were operating at their minimum efficient scale,thereby producing an efficient outcome. B)policymakers came to understand that many oligopolistic firms were producing output levels that resulted in allocative efficiency. C)policymakers realized that they did not have effective tools for promoting efficiency. D)Canada's Competition Bureau,and similar agencies in other countries were so successful at promoting competition that such regulation is no longer required. E)domestic firms are now exposed to more international competition due to falling transportation and communication costs.

In many cases throughout Canadian history,governments have sought to control the behaviour of oligopolistic firms through either ownership or regulation.Policymakers are now skeptical of such practices because 1)many innovations in products and production methods that have led to increases in living standards are attributable to firms in oligopolistic industries; 2)it became clear that oligopolistic industries can achieve both productive and allocative efficiency without government intervention; 3)the regulatory body often ends up protecting the firms from competition. A)1 only B)2 only C)3 only D)1 and 2 E)1 and 3

The objective of government regulation and competition policy can be described as a means to A)promote economic efficiency. B)make at least one person better off at the expense of others. C)reduce inequality in the economy. D)increase fairness in economic activities. E)make all industries perfectly competitive.

A major aim of Canadian competition policy is to A)eliminate oligopolies and the allocative inefficiency that they entail. B)prevent further concentration of industries where such concentration would lessen competition. C)monitor the pricing practices of crown corporations. D)protect Canadian companies from unfair foreign competition. E)achieve a perfectly competitive market structure in all markets in the Canadian economy.

An allowable defence for a merger according to Canada's Competition Bureau is that A)merging firms find it easier to decide how they will share the market. B)merging firms are more profitable because they no longer have to compete with one another. C)the gains in efficiency resulting from the merger more than offset any reductions in competition. D)merged and therefore bigger firms are better placed to compete globally. E)larger firms are easier to regulate.

In Canada,a significant challenge for the Competition Bureau when reviewing a possible merger between firms in a concentrated industry is to A)determine whether efficiency gains make the merger desirable. B)determine whether monopoly no longer poses a threat to the Canadian economy. C)impose effective entry barriers to the industry. D)determine whether criminal charges are required due to unlawful collusion. E)allow those mergers that lead to larger firms that are easier to regulate.

In Canada,the Competition Act specifies that in antitrust cases the "watchdog" is the A)Senate. B)Commissioner of the Competition Bureau. C)Supreme Court of Canada. D)minister responsible for Industry Canada. E)prime minister.

The administrative agency established to enforce the provisions of the Competition Act is the A)Competition Bureau. B)Federal Free Trade Practices Commission. C)Department of Consumer and Corporate Affairs. D)Competition Tribunal Act. E)Director of Investigations.

Canadian governments (federal,provincial and municipal)employ public ownership or regulation of industries in an effort to A)ensure that the goal of profit maximization is being pursued because this ensures allocative efficiency. B)produce a more equitable distribution of income between consumers and producers with monopoly power. C)protect consumers from the high prices and restricted output associated with monopoly power. D)promote productive efficiency in all industries. E)transfer monopoly profits from private firm owners to the government.