Suppose the quality of service provided by a newly regulated firm begins to deteriorate soon after regulation is enforced.Which of the following types of regulation is most likely being used?

Question

Quizplus · Accepted Answer

Output regulation sets a target level of output or service provision that the regulated firm must meet. If the quality of service deteriorates soon after regulation, it suggests that the firm may not be meeting its output targets and may need to be further monitored or sanctioned. Price regulation and profit regulation are less likely to directly affect the quality of service provided by a firm.

Suppose the Quality of Service Provided by a Newly Regulated