Which of the following statements most accurately describes a benefit of deregulation? A) The effects of the capture hypothesis will no longer exist, resulting in decreased prices for consumers. B) The removal of government-imposed guidelines will lead to a decrease in unemployment, because firms will experience lower labor expenses. C) When government-mandated barriers to entry and exit are eliminated, an industry will become more competitive. D) Unions will have increased power in the deregulated industry, thus providing greater protection for its workers.



is C the right answer?


yes C is correct i rmb it from qbank

right on people, C is the correct answer. I thought it was D and ofcourse it was an end to a very busy day and doing a Econ20 ques test at 1.30 AM is what takes you to all the wrong answers :slight_smile:

what is the “capture hypothesis”?

C sounds best… not sure why it can’t be A though. no more capture = lower prices, no?? or is it the firms will earn lower returns.

Capture hypotheses takes place when government chooses regulators to regulate the industry who were once the ‘experts’ of those industry. So there still remains that bias to do some good to the industry by supporting decision that favors the industry growth.

Most def C)