Multiple Choice
Suppose that a regulated industry experiences an increase in the price of inputs used to produce the good. According to the capture theory, we would expect
A) prices to increase by a little immediately and profits to decrease by a lot.
B) there will be some increase in price but not immediately.
C) no increase in price.
D) a quick increase in price maintains profits in the industry.
Correct Answer:
Verified
Correct Answer:
Verified
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