Rate of Return Regulation Is Equivalent to

question 89

Multiple Choice

Rate of return regulation is equivalent to

• A) average cost pricing rule.
• B) marginal cost pricing rule.
• C) maximizing consumer surplus.
• D) maximizing producer surplus.

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Definitions:

Capital

Financial assets or the financial value of assets, such as funds held in deposit accounts and/or the physical factories, machinery, and equipment used to produce goods or services.

Pareto Optimal

A state of allocation of resources in which it is impossible to make any individual or preference criterion better off without making at least one individual or criterion worse off.

Marginal Rates

The additional cost or benefit gained from a small or marginal change in production, consumption, or investment.

Water

A transparent, tasteless, odorless, and nearly colorless chemical substance, which is the main constituent of Earth's hydrosphere and the fluids of most living organisms.