A Major Problem with Regulatory Agencies Is That They

question 217

Multiple Choice

A major problem with regulatory agencies is that they

• A) have no real legal power over the industries they are supposed to regulate.
• B) tend to be too tough on the firms they are regulating, forcing them into a loss position.
• C) often underestimate the firm's cost of production and consequently force regulated firms into a loss position.
• D) often come to represent the interests of established firms in the industry and use their power to limit competition.

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Definitions:

Balance Sheet Classification

The organization of assets, liabilities, and shareholders' equity in a company's balance sheet according to standards and principles of accounting.