Regulations are frequently implemented that attempt to deal with markets with high barriers to entry. Which statement is least likely to be a reason why they often fail?
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A) |
Due to regulation, a firm has little incentive to control costs as the costs can be shifted to consumers via a price increase. | |
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B) |
An existing firm in the industry is able to influence the regulatory board. | |
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C) |
Regulators prevent monopolists from making a profit. | |
Regulators do not seek to prevent monopolists from making a profit. Instead using average cost pricing, regulators will try to prevent monopolists from making a zero economic profit and ensure the monopolist a normal profit. Both remaining choices are reasons why regulations can fail. | 
发表于 2010-4-17 09:31
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