Question

In: Economics

What is meant by concentrated benefits and dispersed costs? How does this relate to rent seeking...

What is meant by concentrated benefits and dispersed costs? How does this relate to rent seeking and lobbyists?

Solutions

Expert Solution

ANSWER:--

  • At the point when government sets up prohibitive polices and portion which deny the import of the specific wares to its nation and permit just the nearby makers and makers to create and deal, it scaled down the opposition of the items in the worldwide market and in neighborhood showcase the makers can charge significant expense.
  • Purchasers in such economies that put limitations on unhindered commerce have follow through on greater expense for less rivalry from worldwide market.
  • This is known as the idea of scattered expense. This is spread over the wide populace in the nation so individuals don't see it.
  • Advantages of portion are additionally enormous on the grounds that it helps the couple of makers and organizations.
  • That is the reason it is called concenterated benefits since it helps not many organizations. That is the reason they go through a ton of cash in campaigning(lobbing) and guaranteeing that the portions stay in power with the goal that they can profit.

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