Which of the following is an example of limiting control under competition law?

Prepare for the ACA ICAEW Tax Compliance Exam. Study with flashcards and multiple choice questions, each question has hints and explanations. Get ready for your exam!

Limiting control under competition law refers to practices that may restrict competition in a market, potentially leading to monopolistic behavior or market manipulation. Controlling the number of products produced is a prime example of this because it directly affects market supply. By limiting production, a company can control the availability of goods, which can lead to higher prices and reduced competition, as fewer competitors can enter the market or compete effectively.

In essence, restricting production can stifle innovation and prevent new entrants from capturing market share, ultimately harming consumer choice and leading to higher prices. This type of control falls squarely under competition law scrutiny as it undermines the fundamental principles of a competitive market.

The other options, while they may touch on competitive practices, do not exemplify limiting controls to the same extent as restricting production. For example, restricting advertising budgets may influence market reach but does not directly control supply. Exclusive deals with retailers might impact distribution limits but could also enhance competition by allowing retailers to differentiate products. Finally, setting a minimum price might address concerns with price wars but does not inherently limit production or the number of competitors in a market. Each of these considerations is important in understanding how competition law aims to maintain fair competition and protect consumers.

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