Suppose That a Regulated Industry Experiences an Increase in the Price

question 227

Multiple Choice

Suppose that a regulated industry experiences an increase in the price of inputs used to produce the good. According to the capture theory, we would expect

• A) prices to increase by a little immediately and profits to decrease by a lot.
• B) there will be some increase in price but not immediately.
• C) no increase in price.
• D) a quick increase in price maintains profits in the industry.

---

Definitions:

Low-Side Pressure

Refers to the pressure in the low-pressure section of a refrigeration or air conditioning system.

High-Side Pressure

The pressure within the condenser side of a refrigeration or air conditioning system, often indicating the pressure of the refrigerant as it is condensed into a liquid.

Damaged Compressor

Refers to a compressor that has suffered wear, tear, or breakage, impairing its functionality in systems like air conditioning or refrigeration.

Sight Glass

Allows a technician to see the flow of a liquid in a line (such as fuel or refrigerant) for diagnostic purposes.