According to the capture hypothesis of regulation,

A. regulation benefits the consumers over producers because the number of consumers is greater than the number of producers, giving the consumers more political clout.

B. regulation favors producers over consumers because the producers were able to pay off the regulators.

C. regulation benefits the regulators and the legislators who support the regulation by enabling them to obtain favors from both producers and consumers.

D. regulation eventually favors producers over consumers because the producers have more at stake than individual consumers.

Question

Business

Mara Daugherty

3 March, 16:53

According to the capture hypothesis of regulation,

A. regulation benefits the consumers over producers because the number of consumers is greater than the number of producers, giving the consumers more political clout.

B. regulation favors producers over consumers because the producers were able to pay off the regulators.

C. regulation benefits the regulators and the legislators who support the regulation by enabling them to obtain favors from both producers and consumers.

D. regulation eventually favors producers over consumers because the producers have more at stake than individual consumers.

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Answers (1)

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Hugo Norton · Answer 1

D. regulation eventually favors producers over consumers because the producers have more at stake than individual consumers.

Explanation:

Regulatory capture is an economic theory that says regulatory agencies may come to be dominated by the industries or interests they are charged with regulating.