Suppose you are a plumber and plumbers are not required to be licensed. A government official proposes to license plumbers, with practicing plumbers automatically receiving a license. Under the proposal, new plumbers would have to pass a test in order to receive a license. If the proposed law passes, you can expect
A)plumbing errors to become a thing of the past.
B)much additional competition as new entry occurs.
C)increased respect for your profession.
D)greater market power and less competition.
E)lower prices for plumbing services.

Question

Quizplus · Accepted Answer

Licensing can create barriers to entry, reducing competition and increasing market power for existing plumbers.

Suppose You Are a Plumber and Plumbers Are Not Required