The city of Dustin is going to grant an exclusive contract to provide cable TV for the next year.The economic profit of the contract is thought to be $5 million.Firm 1 and firm 2 are competing for the contract.The firm that spends the most on lobbying will be awarded the contract.
-Refer to the information above.The reason firm 1 and firm 2 will continue to escalate spending on lobbying efforts is that
A) those making the decision demand "gifts."
B) the CEOs of the two firms are rivals.
C) spending $1 more than your opponent means winning the contract.
D) the firms can pass the cost along to consumers.
E) it serves to maximize profit.
Correct Answer:
Verified
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