The Interstate Commerce Commission (ICC) Regulates Railroads, Barges and Trucks

question 235

Multiple Choice

The Interstate Commerce Commission (ICC) regulates railroads, barges and trucks. Suppose technical change lowers the costs of railroads. As a result, the ICC permits railroads to lower prices some but also alters the rates of barges and trucks so they get additional business. The ICC would be acting consistently with

• A) the capture theory of regulation.
• B) the public interest theory of regulation.
• C) the share-the-gains, share-the-pains theory of regulation.
• D) None of the theories presented in the text since economic regulation is specific to a single industry and not to agencies that cover more than one industry. That is the province of social regulation.

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Definitions:

Transformation Processes

The series of actions or operations that convert inputs into outputs, adding value in manufacturing or service delivery.

Service Business

A business that provides intangible products or services to consumers instead of selling physical goods.

Transformation Processes

The sequences of actions or operations that convert inputs into finished goods or services, altering the state, composition, or condition.

Add Value

The process of increasing the worth of a product or service by improving it or adding features to it.