Which of the following best describes the capture theory of regulation? i. Regulation seeks an efficient use of resources.
Ii) Regulation is aimed at keeping prices as low as possible.
Iii) Regulation helps firms maximise economic profit.
A) i only
B) ii only
C) iii only
D) i and ii
E) i, ii and iii

Question

Quizplus · Accepted Answer

The capture theory of regulation suggests that regulatory agencies may come to be dominated by the industries they are charged with regulating, leading to regulations that serve the interests of firms, potentially helping them maximize economic profit.

Which of the Following Best Describes the Capture Theory of Regulation