When Competitive Forces in an Industry Are Weak

question 161

Multiple Choice

When competitive forces in an industry are weak,

• A) the absence of competition generally leads to overproduction.
• B) prices may exceed the amount consumers are willing to pay.
• C) the operational efficiency of private firms will be enhanced.
• D) higher prices and less than optimal production may result.

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Definitions:

Agency Independence

The degree of autonomy and freedom from external control and influence that an administrative agency has, allowing it to operate without political pressure.

Separation of Power

A constitutional principle that divides the responsibilities of government among distinct branches to prevent the concentration of power and ensure checks and balances.

Legislative Branch

One of the three branches of the U.S. government, responsible for making and enacting laws, consisting of the Senate and the House of Representatives.

Enabling Legislation

The statute by which a legislative body creates an administrative agency.