Regulatory Capture Occurs When Government Exerts Excessive Control Over an Industry

question 71

True/False

Regulatory capture occurs when government exerts excessive control over an industry.

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Definitions:

Price Leadership

A market strategy where a leading firm sets prices that other firms in the market follow.

Price Cuts

A reduction in the selling price of goods or services, usually to stimulate demand or compete more effectively.

Price War

Successive, competitive, and continued decreases in the prices charged by firms in an oligopolistic industry. At each stage of the price war, one firm lowers its price below its rivals’ price, hoping to increase its sales and revenues at its rivals’ expense. The war ends when the price decreases cease.

OPEC

The Organization of the Petroleum Exporting Countries, a group of oil-producing nations that coordinates policies to control the supply and influence the price of oil on the global market.