Utility price and profit regulation is designed to address:
A) failure by incentive.
B) failure by market structure.
C) positive externalities.
D) negative externalities.

Question

Quizplus · Accepted Answer

Utility price and profit regulation is designed to address market failure, which is characterized by the inefficiency in the allocation of resources due to a lack of competitiveness in the market. This usually occurs when there is a monopolistic market structure. The regulation aims to prevent the abuse of market power by the utility companies and protect consumers from price gouging.

Utility Price and Profit Regulation Is Designed to Address