One problem associated with public regulation of industries has been the tendency for
A) regulators to set prices below average variable costs.
B) most regulatory agencies to be incapable of carrying out their duties.
C) regulatory commissions to accommodate the requests of the businesses they are supposed to regulate at the expense of the public.
D) regulatory agencies and legislation to be ruled unconstitutional by the courts.
E) public regulation to be introduced in markets characterized as natural monopolies, where such regulation is least appropriate.

Question

Quizplus · Accepted Answer

Regulatory capture occurs when regulatory agencies, created to act in the public interest, eventually come to serve the specific interests of the industries they were designed to regulate. Over time, industries can exert significant influence on regulatory agencies, leading them to work in their interest over the public interest. This has been a problem associated with public regulation of industries.

One Problem Associated with Public Regulation of Industries Has Been