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AP Microeconomics/Unit 2: Supply and Demand
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Antitrust Policy and Contestable Markets
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In considering antitrust policies regulating monopolies what would be likely outcome if regulators underestimate contestability existing markets?

A

Breakup dominant firm that drives down overall industry profits while creating room multiple smaller players compete against each other ;

B

Regulators may unintentionally stifle innovation by imposing excessive restrictions innovative companies that are not true monopolies but rather exert temporary market power due niche specialization dynamic competition environment .

C

Excessive focus single large entity ignoring emerging threats consolidation related sectors global economy .

D

Overregulation leading actual enhancement welfare consumers monopoly produces unique good/service serves particular need society ;

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