Question

Which of the following are examples of possible regulatory failures. SELECT ALL THAT APPLY a Companies with higher profnts are able to fund lobbyists to communicate directly to legislatures about the company's interests Political campaigns accept donations and provide preferential access to candidates and policy makers seeking re-election based on the size of the donation. industries with a larger number of firms across a wider geographic area can more readily pool resources and influence legislators from multiple jurisdictions. a News reports that Congress is debating eliminating subsidies for electric vehicles causes consumers considering this purchase to act now spiking sales l In the annual State of the Union address, the President outlines policy preferences and legislative goals which may or may not become laws

Answer 1

Below examples are the possible regulatory failures except last one.

1 Companies with high profits are able to fund lobbyists to communicate directly to legislatures about their companies interests.

Explanation since companies with high profits has the money power with which they can influence the congress/legislature to influence their regulatory framework by making laws/amendments in law so that these companies interests and profits are not hurt. These companies give huge donations to legislators both in opposition and in power to influence their behavior and get favorable regulations which are biased towards them but not good for the public/citizens of that country, i.e. USA and becomes regulatory failure.

2 Political campaigns accept donations and provide preferential access to candidates and policy makers seeking re-election based on the size of the donation.

Explanation: Companies often give donations and often big donations to political parties in most of the country, i.e. US and ask for a meeting with the candidates and policy makers seeking for re-election in order to lobby their demand and to be incorporates into the regulations/laws for their economic benefit even if same regulation is hurting the public/citizens of that country or a certain portion of that citizenry and that's why same becomes regulatory failure.

3 Industries with large numbers of firms across a wide geographic area can more readily pool resources and influence legislators from multiple jurisdictions.

Explanation: Large industries with large number of firms which are spread across a wide geographic area pool resources in order to influence the legislators for the demands to be incorporated into the regulations and laws and and if any adverse regulation is to be implemented that the concerned industry lobby for compromised amendments which gives them scope to manipulate amended regulations in order to get benefit out of the same and even restrict or make difficult the entry of new entrants which helps the industry but harms the public with huge health cost, environmental cost and decrease in social benefit and this resultantly becomes possible regulatory failure.

4 News reports that congress is debating eliminating subsidies for electric vehicles causing consumers considering this purchase to act now spiking sales.

Explanation: Change in regulation/amendment in law/elimination of subsidy news for electric vehicles causes spike in sales for these type of vehicles and this harms consumers since they to have to shell out their savings or they will take quick and costly loans and this will cause then unnecessary financial burden but will help the electric vehicle companies and this will result into a possible regulatory failure.

5 In the annual state of the Union address, The President outlines policy preferences and legislative goals may or may not become laws is not a regulatory failures

Explanation: Since this is Presidents annual address and does not shows any influence of lobbying by the industry as a whole and different companies and that's why is not a regulatory failures.