Antitrust Law

Answer choices

1. A

   Correct68% picked this

   By limiting consumers’ choices, abuse of monopoly power reduces consumers’ welfare, but monopoly alone can sometimes actually operate

   Why this is right

   This sounds reasonable. It has a tie-in to the existing last sentence and it otherwise doesn't raise any red flags. The final sentence was clarifying that, "Since the main goal of antitrust laws is to promote consumers' welfare, monopoly power itself isn't against the law but abuse of monopoly power is". This answer is just spelling out the implications of that: monopoly power itself can promote consumers' welfare, but abuse of monopoly power does not.

   Skill tested: Add to the Passage · how this choice captures the passage's function is the move to repeat next time.

   68%
2. B

   Opens Up New Topic Strong: needed8% picked this

   What is needed now is a set of related laws to deal with the negative impacts that monopoly itself has on consumers’ ability

   This would suddenly change the passage. The author was never describing a Problem for which we needed to come up with a Solution. The author was just describing antitrust laws, and in a sympathetic way, not an antagonistic way. He hasn't previously expressed a concern about the negative impacts of monopoly itself.

   8%
3. C

   Too Narrow: comm / comp industries5% picked this

   Over time, the antitrust laws have been very effective in ensuring competition and, consequently, consumers’ welfare in the volatile

   The first half of this could potentially be fine, but there's no reason the author would wrap up the passage by focusing on the communications and computer systems industries. He referenced those industries very briefly at the end of the 4th paragraph, but just as an example. They were never a main focus of the passage, and nothing in the passage ever suggested that they are a particularly volatile industry. This sentence, if we remove some grammatical filler is saying, "Thus, antitrust laws have been effective in ensuring competition in the communications and computer systems industries", which is elevating those industries into the role of the central topic, where they don't belong.

   5%
4. D

   Out of Scope11% picked this

   By controlling supracompetitive prices and corresponding supracompetitive profits, the antitrust laws have, indeed, gone a long way

   Out of Scope: supracompetitive profits Out of Scope: controlling prices This answer feels pretty reasonable overall, except for the fact that it invents the concept of supracompetitive profits. The idea of supracompetitive prices is discussed -- it means a price that is higher than the maximum price that would normally be charged for close substitutes. But there's no such thing as competitive profits or supracompetitive profits. Also, antitrust laws don't actually police supracompetitive prices. By themselves, they do not constitute an abuse of power. (3rd paragraph): Antitrust laws do not attempt to counter the mere existence of monopoly power, or even the use of monopoly power to extract extraordinarily high profits.

   11%
5. E

   Out of Scope: as noted above8% picked this

   As noted above, the necessary restraints on monopoly itself have been left to the market, where competitive prices and economies of scale

   The author told us previously in the passage that antitrust laws do not police monopoly power itself. There's nothing in those laws that's violated when Wal-Mart achieves incredibly low prices through economies of scale. The author never told us that "the market provides the necessary restraints on monopoly itself". We might infer that the author, or the drafters of antitrust laws, believes something similar to that, but it certainly wasn't "noted above". Comparing this answer to (A), if we asked ourselves which one better connects to the current final sentence, (A) would win. And if we asked ourselves which one better "bookends" back to the beginning of the passage (which is about violating antitrust laws via the abuse of monopoly power), (A) would win again.

   8%