(Last Word) Despite the fact that occupational licensing in many industries is unnecessary for the protection of consumers, these licensing requirements are implemented or increased because of
A) the principal-agent problem.
B) inclusive unions.
C) the special-interest effect.
D) efficiency wages.

Question

Quizplus · Accepted Answer

The special-interest effect refers to a situation in which a small group of individuals or businesses benefits at the expense of the larger public. In the case of occupational licensing, it is often the established practitioners in a given field who benefit from the increased requirements, while potential new entrants are prevented from competing. This creates a barrier to entry and decreases competition, resulting in higher prices for consumers. The special-interest effect is thus the most likely reason for unnecessary occupational licensing requirements to be implemented or increased.

(Last Word) Despite the Fact That Occupational Licensing in Many