An Expansion in the Number of Plumbers in a Local

question 87

Multiple Choice

An expansion in the number of plumbers in a local area has resulted in lower profits. The local plumbing contractors have called a meeting to discuss ways to improve their long-run profitability. Of the four plans being discussed seriously, which would most likely increase their long-run profits?

• A) passage of legislation requiring new contractors to be licensed, which would require passing a stiff licensing exam and paying a $5,000 fee
• B) an "off-the-record" agreement that each plumbing contractor would increase his or her prices by an average of 7 percent
• C) passage of legislation requiring the local government to share the cost of installing all private sewage systems
• D) repeal of the current tax on installations of plumbing units

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