According to the fair-return principle of regulation, a firm can charge a price high enough to allow it to realize an economic profit.

Name: According to the fair-return principle of regulation, a firm can charge a price high enough to allow it to realize an economic profit.
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Question

Quizplus · Accepted Answer

The fair-return principle of regulation allows a firm to charge a price that enables it to cover its costs and earn a normal profit, but not an economic profit, which would imply earning above the normal return on investment.

According to the Fair-Return Principle of Regulation, a Firm Can