Regulation in Which a Regulatory Commission Must Allow Any Firm

question 33

Multiple Choice

Regulation in which a regulatory commission must allow any firm under its jurisdiction to earn a rate of return for the firm's investors that is sufficient to warrant their keeping their capital investment in the firm is called

• A) overregulation
• B) rate-of-return regulation
• C) insider trading

---

Definitions:

Contribution Margin Ratio

A ratio that measures the proportion of each sales dollar remaining after variable costs have been deducted.

Unit Contribution Margin

The difference between the selling price per unit and the variable cost per unit of a product, indicating how much each unit sold contributes to covering fixed costs and generating profit.

Break-even

The situation in which complete costs equate to total revenues, achieving a break-even point with no gains or losses.

Unit Sales

The number of individual units sold by a company during a specific period.