One Difference Between the Public Interest Theory and the Economic

Multiple Choice

One difference between the public interest theory and the economic theory of regulation is that the former

A) asserts that regulation is a response to market failure and the latter that it is a response to the existence of natural monopolies and externalities.
B) asserts that regulation is a response to market failure and the latter that it is a response to pressure group action designed to promote the interests of regulated firms.
C) is based on qualitative analysis and the latter is based on quantitative analysis.
D) argues that regulation is inappropriate while the latter proves that it is essential.