Firms hiring lobbyists to keep out new entrants and avoid competition is an example of
A) regulatory restrictions.
B) economies of scale.
C) marginal cost pricing.
D) rent seeking.

Question

Quizplus · Accepted Answer

Rent seeking involves spending money on political lobbying to increase one's share of existing wealth without creating new wealth. In this context, firms hire lobbyists to influence regulations in a way that limits competition, which is a classic example of rent seeking.

Firms Hiring Lobbyists to Keep Out New Entrants and Avoid