Behavior on the part of the firm that allows it to comply with the letter of the law but violate the spirit reducing the law's effect is

Question

Quizplus · Accepted Answer

This behavior is commonly known as creative response or regulatory gamesmanship. The firm may follow the literal interpretation of the law but engage in practices that violate the intended purpose and undermine the effectiveness of the law. This can occur in competitive markets, not just monopolies or markets with asymmetric information.

Behavior on the Part of the Firm That Allows It