Which of the following statements provides the best description of one reason why regulation of an industry might not increase economic efficiency?

Question

Quizplus · Accepted Answer

If the regulated industry has stronger incentives to be involved in the regulation process than the general public, it may be able to manipulate regulations to its advantage rather than promoting economic efficiency. This is known as regulatory capture and can result in regulations that benefit the regulated company at the expense of consumers and other stakeholders.

Which of the Following Statements Provides the Best Description of One