What is rent seeking and how is it related to regulatory capture?
What will be an ideal response?
Rent seeking is the attempt by individuals and firms to use government action to make themselves better off at the expense of others. Regulatory capture is one way of accomplishing rent seeking, as it allows firms to influence a regulatory agency to make decisions that are in the best interest of the firms, even if these actions are not in the public interest.
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A demand curves describes
a. the amount of units a consumer will purchase at a given price b. the amount of units a producer will sell at a given price c. both the amount of units that a consumer will buy and a producer will produce at a given price d. the amount of units supplied given a change in prices
Which of the following is most likely to contribute to the presence of monopoly in an industry?
a. economies of scale b. an elastic market demand for the product produced by the industry c. inefficiency due to bureaucratic decision-making procedures in the industry d. controlling over 50 percent of the market