Question

Every year the u.s. sugar industry, which is dominated by only a few firms, spends millions of dollars lobbying members of congress and contributing to their re-election campaigns. it does so for both democrats and republicans. one goal of these contributions is the preservation of the u.s. sugar quota, which limits the importation of less expensive sugar from other countries. ultimately, all of these activities are motivated by a desire among u.s. sugar producers to:

Answer 1

I assume there are choices here, but these companies want to limit cheap imports to ensure they are making high profit margins by maintaining a high price.

Answer 2

Answer:

rent seeking.

Explanation:

Rent seeking happens when one organization or a group of organizations makes a large economic rent at the expense of the general public through the manipulation of public policies. Rent seeking is usually tied to government corruption since these organizations need that the government imposes barriers or limitations to other competitors so that they can make larger profits, or they request unnecessary grants or subsidies.  

In this case everyone loses except domestic sugar producers:

- Domestic sugar producers and their workers GAIN because they can sell their products at higher prices and therefore make higher profits.

- Consumers LOSE because they will pay a higher price for sugar and other products that use sugar as a key input, e.g. candy

- Industries that use sugar and their workers LOSE because they need to pay higher prices for a key input like sugar.

- The U.S. economy LOSE because it reduces jobs in other industries that use sugar as a key input, e.g. candy industry, bakeries, pharmaceuticals, beer brewers, etc. (a lot of industries use sugar in their manufacturing processes). When jobs are reduced, the whole economy suffers since consumption falls and social costs increase.