Deregulation can solve the problem of regulatory capture and increase economic efficiency:

Question

Quizplus · Accepted Answer

Deregulation can increase competition in an industry, thereby reducing the likelihood of regulatory capture and increasing economic efficiency. A monopoly, as in choice A, would be counter-productive to this goal. Tightening regulations, as in choice C, may also be necessary in certain circumstances, but this is not a direct result of deregulation. Similarly, the generation of external costs, as in choice D, is a separate issue from regulatory capture and economic efficiency.

Deregulation Can Solve the Problem of Regulatory Capture and Increase