Georgia Assessments for the Certification of Educators GACE Practice Test

What is the main reason the government might be concerned about the merger of the only two oil refiners in the U.S.?

1. It could constitute a pyramid scheme

2. It could reduce employee choices

3. It could violate antitrust laws

4. It could violate environmental laws

The correct answer is: It could constitute a pyramid scheme

The primary concern regarding the merger of the only two oil refiners in the U.S. centers around the potential for it to violate antitrust laws. Antitrust laws are designed to promote competition and prevent monopolies in order to protect consumers and ensure fair market practices. A merger between the two companies would significantly reduce competition within the oil refining industry, potentially leading to higher prices, reduced output, and less innovation. If the merger were to occur, it could create a situation where a single entity controls a substantial portion of the market, diminishing the competitive landscape and harming consumers. The government actively monitors and regulates mergers that could lead to monopolistic practices, making sure that such actions do not unfairly restrict the market or harm consumer interests. Therefore, the government's concern would primarily relate to the implications for market competition rather than employee choices or environmental laws.