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Question
Suppose technical change permits cable television companies to provide their services at lower rates. The share-the-gains, share-the-pains theory would predict that the regulators would
A) permit the firms to keep the savings and would lower prices only if the firms were pressured to do so.
B) force the firms to pass all the savings on to consumers in the form of lower prices.
C) force the firms to pass the savings on to consumers in the form of better service.
D) force the firms to pass some of the savings on to consumers and to permit the firms to keep some of the savings themselves.
Answer
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