Agency "Capture" Occurs When

question 5

Multiple Choice

Agency "capture" occurs when

• A) an iron triangle forms.
• B) Congress begins to assume the regulatory functions that a federal agency is supposed to handle.
• C) a regulating agency begins to control the actual industry or business that it regulates.
• D) an industry begins to gain undue influence over the agency that regulates it.
• E) lobbyists effectively run a federal agency, performing all regulation duties themselves.

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Definitions:

Monopolistically Competitive

Refers to a market structure where many firms sell products that are similar but not identical, allowing for some degree of product differentiation and market power for each firm.

Price Control

Government-imposed limits on the prices that can be charged for goods and services in the market to control inflation and stabilize the economy.

Monopolistically Competitive

A market structure where many firms sell products that are similar but not identical, allowing for competition based on quality, price, and branding.

Marginal Cost

The increase or decrease in the total cost incurred by producing one additional unit of a product or service.