Month: July 2025

The following statements have been made about anti-monopoly legislation and market regulation.

Statement 1 – Anti-monopoly legislation is undertaken to compensate for lack of competition, and market regulation is undertaken to promote competition

Statement 2 – Anti-monopoly legislation is undertaken to promote competition and market regulation is undertaken to compensate for lack of competition

Statement 3 – Anti-monopoly legislation is undertaken to promote competition and market regulation is also undertaken to promote competition

Are these statements true or false?

Select ONE answer:

1. Statement 1. True and Statement 2. False and Statement 3. True
2. Statement 1. True and Statement 2. False and Statement 3. False
3. Statement 1. False and Statement 2. True and Statement 3. True
4. Statement 1. False and Statement 2. True and Statement 3. False

Show your workings to arrive at your answer, and explain and justify your reasons:

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This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct == > The first and third statements are false, but the second statement is true – anti-monopoly legislation favours competition, but where competition is not possible, then market regulation is used to compensate for the lack of competition.

This work is licensed under a Creative Commons Attribution 4.0 International License.

Anti-monopoly laws are based on the proposition that the best way to achieve efficiency and the avoidance of excessive prices is through?

Select ONE answer:

1. Regulation
2. Increased competition
3. Public ownership
4. Oligopoly

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct == > Tending towards a perfect market through increased competition should lead to allocative efficiency and lower prices.
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

Supporters of anti-monopoly enforcement argue that the real gain from such enforcement is?

Select ONE answer:

1. That it encourages firms to engage in research, which leads to new products being produced
2. That it serves to deter firms from engaging in such practices as collusion, price-fixing and deceptive advertising
3. That it forces firms to produce efficiently
4. The revenue generated from the fines paid by those individuals who are found guilty of anti-monopoly violations which can be used for socially worthwhile causes

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct == > The main effect of anti-monopoly enforcement is deterrence – there is little innovation effect.
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

In which of the following circumstances would a cartel be MOST likely to operate?

Select ONE answer:

1. A market with an undifferentiated product and many producers
2. A market with differentiated products and few producers
3. A market with many producers and where demand for the product is inelastic
4. A market with few producers and an undifferentiated product

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct == > A cartel is most likely where there are few producers in the market, each of them producing a similar product.

This work is licensed under a Creative Commons Attribution 4.0 International License.

The Competition Act 1998 prohibits agreements, business practices and conduct that damage competition, including abuse of a dominant position.

Examples of specific types of conduct that are particularly likely to be considered as an abuse where the business is in a dominant position include which ONE of the following?

Select ONE answer:

1. Imposing transfer pricing
2. Attaching unrelated supplementary conditions to contracts
3. Providing public goods on behalf of the government
4. Starting a summer TV advertising campaign

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct == > Imposing unfair purchase or selling prices would be considered as an abuse where the business is in a dominant position, but transfer pricing refers to the pricing of goods and services within a multi-divisional organisation, particularly regarding cross-border transactions.
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.