Which of the Following Is Not a Problem with the Operation

Which of the following is not a problem with the operation of regulation in the UK?

A) There is a danger of regulatory capture as regulators become more involved in their industry and get to know the managers on a personal level and may, therefore, become less tough.
B) The increasing complexity of regulation has made planning difficult, which has led to a growth of short- termism.
C) The system is inflexible as it does not allow for the licence and price formulae to be changed as circumstances change.
D) The 'RPI minus X' formula reduces firms' profits and so may lead to a decline in investment and a reduction in the quality of service provided to consumers.
E) The 'RPI minus X' formula was designed to provide an incentive for firms to cut costs, but X was initially set too low, thereby removing the incentive to cut costs.