Multiple Choice
An increase in fixed costs for a monopoly will do which of the following?
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12. Monopoly
Characteristics of Monopoly
Multiple Choice
By creating monopolies and establishing trusts, industrial leaders of the late 1800s primarily:
A
encouraged the entry of new firms into the market
B
increased consumer choice and product variety
C
sought to reduce competition and control market prices
D
promoted perfect competition in their industries
Verified step by step guidance1
Step 1: Understand the historical context of monopolies and trusts in the late 1800s. Industrial leaders formed monopolies and trusts to consolidate control over industries.
Step 2: Recognize the economic goal of these monopolies and trusts. They aimed to reduce competition by merging firms or creating agreements that limited rivalry.
Step 3: Analyze the effect on market prices. With reduced competition, these entities could influence or control prices rather than letting market forces determine them.
Step 4: Contrast this with other options: encouraging new firms or increasing consumer choice would increase competition, which monopolies sought to avoid.
Step 5: Conclude that the primary purpose was to reduce competition and control market prices, which is consistent with the behavior of monopolies and trusts.
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