52. A statement that best reflects an evaluation of monopoly firms is that: A) t

Question

52. A statement that best reflects an evaluation of monopoly firms is that:
A) they are economically efficient.
B) they have little or no market power.
C) consumers are given fewer choices and higher prices.
D) competition should replace all monopolies.

53. In 1984, the Department of Justice reached an agreement with AT&T that:
A) allowed AT&T to continue to provide local telecommunications service to established customers but prevented it from accepting any new customers.
B) allowed the so-called Baby Bells to provide long-distance service to their local customers.
C) separated AT&T from the regional Bell operating companies.
D) led to significant degrees of competition and the reduction of monopoly power in local markets with most of the change coming within 10 years after the agreement.

54. In 1984, the Department of Justice reached an agreement with AT&T that:
A) broke down most of the barriers to entry into the telecommunications industry.
B) allowed the so-called Baby Bells to continue to have significant monopoly power in the local service areas.
C) merged the regional Bell operating companies into a single firm so that they could compete directly with AT&T.
D) led to significant degrees of competition and the reduction of monopoly power in local markets with most of the change coming within 10 years after the agreement.

55. The Telecommunications Act of 1996 was intended to:
A) reduce cutthroat competition in the local markets of the telecommunications industry.
B) prevent mergers and acquisitions within the telecommunications industry.
C) enhance AT&T's competitive position against foreign competitors.
D) encourage greater competition in the local markets of the telecommunications industry.

Explanation / Answer

A monopoly gives consumers fewer options, while charging them higher prices, or C for 52. The 1984 agreement separated AT&T from the regional bell operating companies, or C for 53. It also, for question 54, A, broke down the barriers to entry in the telecommunications industry. The 1996 Act in 55 was intended to D, increase competition in the industry. Hope this helps!!

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