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.
Level of Learning 3: Application of principles

Question

Quizplus · Accepted Answer

This statement is true as it applies the principle that competition among utility companies can lead to lower prices for consumers. Despite PowerHouse's initial capital investment, if it gains a larger market share, it may prompt BXY and other competitors to lower their prices or offer more competitive rates to retain customers.

The PowerHouse Utility Company Recently Built a Nuclear Power Plant