The PowerHouse Utility Company recently built a nuclear power plant in a southern state and started competing against BXY Utility Company that has served customers in that region for 65 years. Due to deregulation, consumers now have a choice among utility companies in this area. Although PowerHouse has made a sizeable capital investment, if it successfully grows market share, eventually prices for electricity may stabilize or fall.

Question

Quizplus · Accepted Answer

This is because competition among utility companies leads to lower prices and more choices for consumers. The new entrant in the market, PowerHouse, will cause BXY to lower its prices or risk losing customers. Over time, this could lead to more stable or even lower prices for electricity in the region.

The PowerHouse Utility Company Recently Built a Nuclear Power Plant