The Capture Theory of Regulation Predicts That

question 268

Multiple Choice

The capture theory of regulation predicts that

• A) regulation helps producers to maximize profits.
• B) regulators capture the firm's economic profit and transfer it to consumers as consumer surplus.
• C) regulators eliminate the deadweight loss a monopoly can create.
• D) resources are used efficiently.
• E) regulators capture the firm's economic profit and transfer it to themselves.

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Definitions:

Unconscionable

Referring to actions or terms that are excessively unfair or unethical to one party in a way that shocks the conscience.

Essential Purpose

The primary or most important goal or function of an object, policy, or legal contract.

Adequate Refund

A reimbursement that is fair and reasonable under the circumstances, often related to the return of purchased goods or services.

Consequential Damages

Refers to secondary or indirect damages that result from a breach of contract, extending beyond the direct damage or loss incurred.