Government regulators in a country announce costly new safety regulations for an industry. These new regulations are welcomed by all the companies in the industry. Why might these companies want this added cost?
A. The new regulations will help differentiate the industry as a whole.
B. The new regulations are a fixed cost and will decrease the marginal cost of each unit.
C. The increased costs will allow companies to raise prices on their products.
D. The new regulations will limit competition by discouraging future entrants.
Answer:D
Government regulators in a country announce costly new safety regulations for an industry. These new regulations are welcomed by all the companies in the industry. Why might these companies want this added cost?
A. The new regulations will help differentiate the industry as a whole. B. The new regulations are a fixed cost and will decrease the marginal cost of each unit. C. The increased costs will allow companies to raise prices on their products. D. The new regulations will limit competition by discouraging future entrants.