One Primary Reason Why Regulatory Capture May Occur in an Industry

question 2

Multiple Choice

One primary reason why regulatory capture may occur in an industry is that:

• A) The government designates unelected officials to head the various regulatory agencies of different industries
• B) There is a lot of bribery and corruption going on in all major industries that the government seeks to regulate
• C) The industry's leaders are the ones who pushed for the government to impose supervision and regulation over the industry
• D) People who are qualified to supervise and regulate the industry often come from the industry itself

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Definitions:

Total Assets

The total sum of all assets, both current and non-current, owned by a business.

Average Collection

The average period of time it takes for a business to receive payments owed by its customers.

Debt-to-equity Ratio

A measure of how a company's assets are financed, comparing the roles of shareholder equity and debt.

Return on Equity

A metric indicating financial success determined by dividing a company's net income by its shareholders' equity, demonstrating the efficacy of using investments to create increased profits.