According to the special interest theory,
a. economic regulation is designed to promote social welfare
b. producers may be able to influence regulators to impose restrictions favorable to producers
c. groups of consumers with special interests may be able to control a regulatory agency to their own benefit
d. foreign lobbyists may be able to control a regulatory agency to their own benefit
e. the fighting between special interest groups over economic regulation may cancel out effects of such regulation
Question 2
At its present rate of output, 200 units, a perfectly competitive firm has variable costs of 10,000 and marginal cost of 50, and accepts the market price of 40 per unit. To improve its profit/loss situation, this firm should
a. increase output
b. reduce output but not to zero
c. maintain the present rate of output
d. shut down
e. raise the price
