The Capture Theory of Regulation, Espoused by George Stigler, Asserts

question 32

Multiple Choice

The capture theory of regulation, espoused by George Stigler, asserts that

• A)consumers "capture" regulatory agencies so that regulation favors consumers
• B)producers "capture" regulatory agencies so that regulation favors producers
• C)regulators "capture" producers and limit their market power
• D)consumers "capture" some consumer surplus lost to monopoly
• E)consumers and producers work together to "capture" regulatory agencies in order to achieve more desirable regulation

---

Definitions:

Shutdown Point

The level of production and price point at which a company's revenue just covers its variable costs, below which the firm would cease operations to minimize losses.

Firm's Output

The total quantity of goods or services produced by a company within a specific time period.

Lowest Price

The minimum cost at which a good or service is offered in the market, representing the least amount a seller is willing to accept.

Long Run

refers to a period of time in which all factors of production and costs can be fully adjusted, including all forms of investment.