The capture theory of regulation predicts that
A) regulation helps producers to maximize profits.
B) regulators capture the firm's economic profit and transfer it to consumers as consumer surplus.
C) regulators eliminate the deadweight loss a monopoly can create.
D) resources are used efficiently.
E) regulators capture the firm's economic profit and transfer it to themselves.
A
Economics
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A rise in the real interest rate will cause which of the components of aggregate demand to decline?
A) Only C B) Only C and I C) Only C, I, and NX D) C, I, G, and NX
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Use the above figure. If a commission regulates the above monopoly using fair-return (average cost pricing), then the industry's output will be ________ and the product's price will be ________
A) Q1; P1 B) Q2; P3 C) Q3; P2 D) Q4; P1
Economics