Profit regulation is desirable because if a firm is permitted a specific profit rate,it has an incentive to limit costs.

Name: Profit regulation is desirable because if a firm is permitted a specific profit rate,it has an incentive to limit costs.
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Profit regulation can lead to inefficiencies as firms may not have the incentive to minimize costs if they are guaranteed a specific profit rate, potentially leading to cost padding or reduced innovation.

Profit Regulation Is Desirable Because If a Firm Is Permitted