Question

What was the effect of the growth of monopolies? A) They increased competition among similar businesses. B) They reduced the need for government intervention. C) They spread equal wealth among the entire population. D) They reduced the number of small businesses within an industry.

Answer 1

A!

Answer 2

I'll throw my vote for D) They reduced the number of small business within an industry.

The reason why is because a monopoly has the resources to bully smaller businesses out of the market. If they opt to undercut their prices, a monopoly can absorb the losses better than a small business can because they typically have a lot more cash to throw around. A small business can't compete for long against that and may go out of business as result.

Or a monopoly may just pool its money together and buy the business out, taking them out of the market. Either way, the monopoly wins leaving fewer choices for the rest of us.

Answer 3

The correct answer is D. Captain_Page_Turner did a great job explaining why. :)

Answer 4

D, and the Captain is quite correct. I should add an additional danger of monopolies and oligopolies is "regulatory capture," whereby a few large companies get the government to rewrite regulations to raise steep barriers to entry for little guys

For example, the recent Consumer Product Safety Improvement Act of 2008 is often considered to be an example of just this. It set standards for products sold to children -- e.g. if you make a little wooden doll you have to perform extremely sensitive and extremely expensive tests for lead on it -- that are essentially impossible to meet for small businesses, but are easy for very large toy companies like Mattell or Hasbro to meet.

With revenues in the $billions, Mattell can easily afford to set up a $10 million in-house testing lab to do all the exquisite testing required, as well as hire a few dozen $150,000 a year lawyers to see that all the paperwork is correctly filled out. Some little crafty mom on Etsy.com trying to sell a dozen handmade dolls can't, and will just go out of business. The net result is that the big guys can drive the little guys out of business, or keep them from entering it because of the very high costs of getting started.

Witha a few $million donated to the right Congressional re-election campaigns, large companies can (and do) attempt to tilt the playing field away from their would-be start-up competitors. They are greatly assisted by public perception, when it is strong, that strong governmetn regulation rather than consumer action is the best protector of consumer interest. That makes it very easy to get onerous regulation passed that ensures that only existing and large firms can stay in business.

Answer 5

i will go for A" option....
coz they increased the competition among themselves and affecting the progress of their country or state coz when there is competition the economic condition is hereby increased.

Answer 6

Was A correct? I'm almost positive D was the right choice.