The social interest theory of regulation is defined as the
A) use of regulations to maximize firms' profits.
B) use of regulations to assure an efficient use of resources.
C) removal of regulations on business activities.
D) implementation and removal of regulations on the cable TV industry.
E) use of rate of return regulation.

Question

Quizplus · Accepted Answer

The social interest theory of regulation suggests that regulations should be in place to ensure an efficient use of resources. This means that regulations should aim to balance the interests of different stakeholders, including consumers, workers, and the environment, in order to promote overall social welfare. Maximizing firm profits or removing regulations on business activities would not align with this theory, and the use of rate of return regulation is not specifically mentioned in the theory.

The Social Interest Theory of Regulation Is Defined as the