Question

Which of the following will NOT likely result in a monopoly for the market?

a. The United States government dictates who is able to lay internet cable underground in a new residential area
b. FDA dictates that pharmaceutical companies publish detailed reports explaining how their drugs are created and at what cost.
c. The city of Makebelieve finds it's much too expensive to build additional power plants in the area as opposed to letting the ones already in operation grow.
d. The world's supply of platinum runs low so that only one particular mountain in South Africa can be mined for it. The De Beers diamond company already operates in the area.

Answer 1

The correct answer is answer B ("FDA dictates that pharmaceutical companies publish detailed reports explaining how their drugs are created and at what cost").

A monopoly of the market can occur in many different ways, defined by the result which is the control of a single entity or business over entire areas of market.

This can happen when the government favors a specific enterprise for whatever reason (like in example A); when the development of new businesses to compete with preexisting ones is blocked by economic factors in a certain region (like it would seem to happen in example C); or a particular company holds the resources needed to run a specific industry (as shown in example D).

In case B, we're only being told that the U.S. Food and Drug Administration (FDA) is demanding reports about how each company in the pharmaceutical business is operating, which would only make the market more fair and benefitial for everybody.

Hope this helps!