Price cap regulation is a type of regulation that
A) offers price subsidies to firms that comply with regulation guidelines.
B) is equivalent to rate of return.
C) sets the maximum price the firm can charge.
D) sets the minimum price the firm can charge.
C
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Explain the process that drives the economic profit to zero in the long run for a perfectly competitive firm
What will be an ideal response?
Suppose environmental groups pressure the local government to reduce the number of pollution rights to be sold. Other things equal,
a. pollution would not be affected b. the price of pollution rights would rise, and the amount of pollution would decrease c. the price of pollution rights would fall, and the amount of pollution would decrease d. the price of pollution rights would fall, and the amount of pollution would increase e. the price of pollution rights would rise, and the amount of pollution would increase