A theory that regulation

serves the self-interest of the producer, who captures the regulator and

maximizes economic profit.

The percentage change in

quantity demanded (in absolute value) is greater than the percentage change in

price (in absolute value).

A natural or legal

constraint that protects a firm from potential competitors.

A market in which economies

of scale enable one firm to supply the entire market at the lowest possible

cost.

Price discrimination that

occurs when a firm sells each unit of output for the highest price that anyone

is willing to pay for it. The firm extracts the entire consumer surplus.