Suppose the transportation industry has been regulated for many years. Government now proposes to deregulate the industry, only to find that firms in the industry oppose this action. This is consistent with the

Question

Quizplus · Accepted Answer

The legal cartel theory of regulation suggests that firms in an industry might oppose deregulation because regulation can limit competition and allow existing firms to maintain higher prices and profits. Deregulation could increase competition, potentially reducing profits for these firms, hence their opposition.

Suppose the Transportation Industry Has Been Regulated for Many Years