The capture theory of regulation is that regulations
A) help producers to maximize economic profits.
B) mean producers suffer losses.
C) result in diseconomies of scale.
D) benefit society, not producers.
E) benefit the regulators, not the producers or the consumers.

Question

Quizplus · Accepted Answer

The capture theory of regulation suggests that regulatory agencies are dominated by the industries or interests they are supposed to regulate, leading to regulations that benefit producers by allowing them to maximize economic profits.

The Capture Theory of Regulation Is That Regulations