Price cap regulation
A) sets the maximum price these firms can charge.
B) gives firms the incentive to exaggerate their costs.
C) does not provide incentives to firms to minimise their costs because firms cannot change prices.
D) Both answers A and C are correct.
E) Both answers A and B are correct.

Question

Quizplus · Accepted Answer

The Answer of Price cap regulation
A) sets the maximum price these firms can charge.
B) gives firms the incentive to exaggerate their costs.
C) does not provide incentives to firms to minimise their costs because firms cannot change prices.
D) Both answers A and C are correct.
E) Both answers A and B are correct.

Price Cap Regulation