Suppose that a regulated industry experiences an increase in the price of inputs used to produce the good. According to the share-the-gains, share-the-pain theory, we would expect

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According to the share-the-gains, share-the-pain theory, when there is an increase in the price of inputs, the industry will share the burden among all stakeholders. This means that prices will increase, but not immediately, and the burden will be shared between the customers through higher prices and the industry through lower profits. Therefore, the best choice is B, as there will be some increase in price but not immediately.

Suppose That a Regulated Industry Experiences an Increase in the Price