What Is One Reason Existing Firms Might Lobby the Government

question 54

Multiple Choice

What is one reason existing firms might lobby the government to increase regulation in their industry?

• A) It increases entry and exit costs, thereby reducing producer surplus to existing firms.
• B) It increases entry and exit costs, thereby potentially increasing producer surplus to existing firms.
• C) It increases entry and exit costs, but has no impact on producer surplus.
• D) Firms cannot be trusted to treat their customers fairly and ethically.

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Definitions:

Alternative Hypothesis

A hypothesis that contradicts the null hypothesis, indicating that there is a significant difference between specified populations.

Significance Level

Another term for level of significance, denoting the cutoff probability for determining when the p-value indicates a statistically significant result.

Nonparametric Tests

Statistical tests not based on assumptions about the form or parameters of the population distribution from which the samples are drawn.

Parametric Tests

Statistical tests that make assumptions about the parameters of the distribution(s) from which one's data are drawn.