The prices that are in the public's best interest will
A)always allow the regulated firm to break even.
B)always allow the regulated firm to make positive economic profits.
C)sometimes leave the regulated firm with economic losses.
D)leave the regulated firm with profits that are about 10 percent higher than those of other firms.

Question

Quizplus · Accepted Answer

Prices that are in the public's best interest may not necessarily ensure positive economic profits for the regulated firm. In some cases, prices may need to be set lower than the firm's costs to provide a necessary good or service to the public. This may result in economic losses for the regulated firm, but it ultimately benefits the public.

The Prices That Are in the Public's Best Interest Will