Suppose Technical Change Makes It Cheaper for Cable Television Suppliers

question 159

Multiple Choice

Suppose technical change makes it cheaper for cable television suppliers to supply their service. The capture theory would predict that the regulators would

• A) allow the firms to capture the savings and would lower price only if the firms asked them to.
• B) force the firms to pass the savings on to consumers in the form of lower prices.
• C) force the firms to pass the savings on to consumers in the form of better service.
• D) force the firms to pass some of the savings on to consumers and permit them to keep some of the savings for themselves.

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Definitions:

Commitment Fee

A charge levied by a lender on a borrower for an agreed loan commitment that has not yet been utilized.

Revolving Credit

A credit facility that allows a borrower to withdraw, repay, and redraw loans repeatedly up to a certain credit limit.

Take-Down

Take-down refers to the process of allocating and distributing securities to interested buyers in an underwriting arrangement.

Prompt Payment Discount

A discount offered to customers by suppliers as an incentive for early payment of their invoices within a specified period.