Question

If Wal-Mart drives out-of-business K-Mart, Target, etc., to become the only significant retailer, what would likely happen?

Select one:
a. The Supreme Court would get involved first.
b. Prices would certainly stay the same.
c. Nothing.
d. This monopoly would give Wal-Mart the ability to set prices higher – thus leading to a near monopoly, potential antitrust suits, and possibly a reduction in customer service.
e. Prices would likely fall.

Answer 1

Sure. If Wal-Mart drives out all of its competitors and becomes the only significant retailer, it would likely raise prices. This is because Wal-Mart would have no competition and could therefore charge whatever it wanted. This could lead to higher prices for consumers.