Collusive industries' lobbying power determined by level of collusion and demand elasticity.
Empirically collusive industries are effective lobbyists because they form protectionistic lobby groups. The level of collusion determines firms' ability to sustain lobbying. The degree of protection depends on the demand elasticity between domestic and foreign goods. This explains why industry concentration has mixed effects on protection. In sectors with imperfect competition, the equilibrium tariff rate is determined, providing new insights into tariff determination.