What Is Regulatory Capture

Multiple Choice

What is regulatory capture?

A) It is a situation in which a policymaker seeks to improve his election prospects by aligning himself with a powerful special interest group which will finance his political campaign.
B) It is the exchange of political support between a regulatory agency and the regulated firm resulting in both parties capturing economic rents.
C) It is a situation in which a firm being regulated successfully influences the regulatory agency's actions to benefit the interests of the firm, rather than the public interest.
D) It is a situation in which a regulatory agency uses its authority to force actions that are not favored by the regulated firms but are in the public's interest.