Select the correct answer.

Why might the Federal Trade Commission forbid Company A and Company B from merging?

A. To prevent a supply shortage in the widget market
B. To regulate the market price of widgets
C. To promote competition between widget makers
D. To protect the environment from widgets



Answer :

Final answer:

The FTC may prohibit the merger of Company A and Company B to uphold competition between widget makers, preventing increased prices and decreased product quality.


Explanation:

The Federal Trade Commission (FTC) might forbid the merger between Company A and Company B to promote competition between widget makers. Mergers that result in a concentrated market or enable a single firm to raise prices can hinder competition, leading to higher prices, reduced availability of goods or services, lower product quality, and less innovation. By preventing the merger, the FTC aims to maintain a competitive market environment for the benefit of consumers.


Learn more about Antitrust Regulations