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Why do some utilities have an incentive to exaggerate their costs of production? 17)

 Why do some utilities have an incentive to exaggerate their costs of production?

 

17) What potential problem is there with rate of return pricing?

18) How can managers of natural monopolies exaggerate their costs?

 

19) Briefly describe and discuss the different ways a natural monopoly can be regulated: Marginal cost pricing, average cost pricing, rate of return regulation, and price cap regulation.

 

Dec 08 2019 View more View Less

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