Many economists agree that government should deal with monopolists on a case-by-

ID: 1192543 • Letter: M

Question

Many economists agree that government should deal with monopolists on a case-by-case basis. Policy options include the following, except:

1.If the monopoly is maximizing economic profits, the government should subsidize new firms to enter the industry

2.If the monopoly is attained and maintained through anticompetitive behavior, the government can file a suit based on antitrust laws

3.If the firm is a natural monopoly, the government may decide to regulate its prices and operations

4.If the monopoly is subject, and vulnerable, to potential competition, the government can decide to leave it alone

If the firm is a natural monopoly , the government may decide to regulate its prices and operations.

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