question archive Cost-of-service regulation allows regulated companies to charge prices that A) reflect the cost of regulating the industry, plus the marginal cost of the product
Cost-of-service regulation allows regulated companies to charge prices that A) reflect the cost of regulating the industry, plus the marginal cost of the product
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Cost-of-service regulation allows regulated companies to charge prices that
A) reflect the cost of regulating the industry, plus the marginal cost of the product.
B) allow monopoly profits to the producer.
C) reflect the actual average cost of providing the services to the customer.
D) are determined by competition in other geographic markets.
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A) reflect the cost of regulating the industry, plus the marginal cost of the product
The cost of service regulation allows the companies to charge prices that can recover the costs of production and also gain some return on the cost. cost of service regulation does not allow the monopoly profits to be earned by the regulated companies. But it also ensures that companies do not go without some economic profit. Hence, the regulation ensures marginal cost to be recovered and also some cost of regulation or the returns on it.
