What effect on the price of hiring a lawyer to draw up a will would the opportunity-cost theory predict as a consequence of legislation requiring the use of a lawyer in all real estate transactions?
A) A higher price as the market becomes flooded with lawyers.
B) A higher price as lawyers find it costs them more to draw up wills
C) No effect because prices are determined by demand, not by cost.
D) A lower price as the market becomes flooded with lawyers
E) A lower price as lawyers find they can now obtain their desired income level with lower fees
B
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If left alone, a natural monopoly will
a. earn normal profits b. earn maximum economic profits c. produce where P = ATC d. face competition from new entrants e. go out of business
The term price takers refers to buyers and sellers in
a. perfectly competitive markets. b. monopolistic markets. c. markets that are regulated by the government. d. markets in which buyers cannot buy all they want and/or sellers cannot sell all they want.