Which of the Following Is a Major Shortcoming of Government

question 177

Multiple Choice

Which of the following is a major shortcoming of government regulation of business monopoly?

• A) The regulators often estimate production costs incorrectly and thus force firms into loss positions.
• B) The regulators often come to represent the interests of the established firms and use their power to limit competition.
• C) The regulators usually permit firms to make unusually high accounting profits.
• D) The regulators, acting in consumers' interests, often force prices so low that even with efficient production techniques the regulated firms lose money.

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Definitions:

Interpersonal Space

The physical distance maintained between individuals to feel comfortable during social interactions.

Eye Contact

A form of nonverbal communication that occurs when two individuals look directly at each other's eyes.

Status

The relative social, professional, or other standing of someone or something within a group or society.

Positive Bias

The tendency to process information in a way that favors positive outcomes or perspectives, sometimes at the expense of objectivity.