In which of the following regulatory arrangements do firms have an incentive to lower their costs and operate more efficiently?

Name: In which of the following regulatory arrangements do firms have an incentive to lower their costs and operate more efficiently?
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Question

Quizplus · Accepted Answer

Price caps incentivize firms to lower their costs and operate more efficiently because they can increase profits by reducing expenses, as their prices are capped rather than directly linked to their costs.

In Which of the Following Regulatory Arrangements Do Firms Have