Why are the prices of some regulated industries often higher than they would be if there were no regulation?
Regulators are often concerned to prevent the failure of firms in an industry. In order to prevent bankruptcy, prices may be raised above competitive levels. If a firm is not responsive to customers, or does not innovate or produce efficiently, it may still earn a profit because the regulatory agency protects it from paying the market price of its failure. The agency is more concerned in this case with maintaining firms than with efficiency and promoting consumer utility.
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If two small perfectly competitive firms merge, the merged firm will be:
a. a price-taker. b. a market leader. c. a price-discriminator. d. an oligopoly.
Answer the following statement(s) true (T) or false (F)
1. Proposals have been submitted to phase down HFCs, a CFC substitute, because they are greenhouse gases contributing to climate change. 2. The “greenhouse effect” is a natural phenomenon. 3. Climate change and global warming are exactly the same phenomenon. 4. Oceans and forests act as natural carbon sinks, which can absorb the anthropogenic releases of CO2. 5. Scientific evidence supports the assertion that human activity is adding to the accumulation of greenhouse gases and therefore contributing to global warming.