When a Firm Is Regulated So That Its Price Enables

question 597

Multiple Choice

When a firm is regulated so that its price enables it to earn a specified target percent return on its capital, the regulation is called

• A) rate of return regulation.
• B) price cap regulation.
• C) earnings limited regulation.
• D) target pricing regulation.

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Definitions:

Industrial Products

Goods produced for use in production and operation for other industries, not intended for direct consumption by consumers.

Raw Materials

The basic substances or components that are used to produce goods or manufacture products.

Full-scale Production

The process where a product is manufactured at its full capacity, utilizing all available resources to meet the demand.