A public utility regulated by an independent regulatory commission according to the policy of "fair-return pricing":

Question

Quizplus · Accepted Answer

A public utility regulated by an independent regulatory commission according to the policy of "fair-return pricing" has little individual incentive to act to lower unit costs because the commission will allow it to charge a price that covers its costs plus a fair return on its investment. It must provide service to all who are willing to purchase its service at the regulated price because it is a public utility. It is not assured, legally, of never going bankrupt because it is still subject to the risks of the market.

A Public Utility Regulated by an Independent Regulatory Commission According