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QuizMultiple Choice

Monopolies and Trusts

Question 1 • RS AZ-US History A

Which statement is true about the relationship between a monopoly and its competition in a market?

Answer
A
Monopolies are formed when businesses buy out their competition in a market.
B
Competition in the market helps monopolies to develop.
C
Competition in the market ensures that monopolies charge fair prices.
D
Monopolies thrive when they have competition.

Explanation

A monopoly exists when one business controls a market and faces little or no competition. A business may gain that control by buying out competing businesses, so the true statement is that monopolies are formed when businesses buy out their competition. The other choices describe competition as helping or benefiting a monopoly, when competition generally limits a firm's market power.

AI-written and checked against the verified answer.

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