Hey guys, Quick question on the afternoon mock they sent out in PDF form the other day.
Afternoon Test - Econ - Sagara - Question 5.
Dudes concern about regulatory structure is most likely an example of?
a) arbitrage
b) capture
c) competition
“Banantoumou’s concern is an example of regulatory capture. Regulated companies’ efforts to fight particular regulations tend to attract more public attention than when the companies are sympathetic to the contemplated regulations. Even more fundamentally, academics have argued that regulation often arises to enhance the interests of the regulated, often called the “regulatory capture” theory. For example, regulatory actions and determinations can restrict potential competition and coordinate the choices of rivals.”
I thought it was regulatory capture and their explanation of the answer sounds like it as well. Why is the answer c) competition?