If occupational safety laws were changed so that firms no longer had to take expensive steps to meet regulatory requirements, we would expect that
A)the demand for products in this industry would increase.
B)the market price of products in this industry would decrease in the short run but not in the long run.
C)the firms in the industry would make a long-run economic profit.
D)competition would force producers to pass the lower production costs on to consumers in the long run.

Question

Quizplus · Accepted Answer

If firms no longer have to spend money on meeting occupational safety laws, their production costs would decrease, resulting in lower prices for consumers. Over time, competitors in the industry would also lower their prices to remain competitive, passing the savings on to consumers in the long run. This would result in a more efficient market, but not necessarily in long-run economic profits for firms.

If Occupational Safety Laws Were Changed So That Firms No