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Rate-of-return regulation : ウィキペディア英語版 | Rate-of-return regulation Rate-of-return regulation is a system for setting the prices charged by government-regulated monopolies. The main premise is that monopolies will be compelled to charge the same price that would ideally prevail in a perfectly competitive market, which is equal to the efficient costs of production plus a market-determined rate of return on capital. Rate-of-return regulation has been criticized because it encourages cost-padding, and because, if the rate is set too high, it encourages regulated firms to adopt inefficiently high capital-labor ratios. This is known as the Averch-Johnson effect, or the Gold-Plated-Water-Cooler effect. Due to the nature of rate-of-return regulation there is no incentive for regulated monopolies to minimize their capital purchases since prices are set equal to their costs of production. Rate-of-return regulation was dominant in the United States for a number of years in the government regulation of utility companies and other natural monopolies. Were these firms to remain unregulated, they could easily charge far higher rates, given that consumers would pay any price for goods such as electricity or water. ==Method of Regulation==
Rate-of-return regulation was used most regularly to determine reasonable prices for goods supplied by utility companies. This regulation is considered fair due to the fact that they give the company the opportunity to recover costs incurred by providing consumers with their goods or services while simultaneously protecting consumers from paying exorbitant prices that would provide these companies with monopolistic profits. Under this method of regulation, government regulators examine the firm's base rate, cost of capital, operating expenses, and overall depreciation in order to estimate the total revenue needed for the firm to fully cover its expenses.
抄文引用元・出典: フリー百科事典『 ウィキペディア(Wikipedia)』 ■ウィキペディアで「Rate-of-return regulation」の詳細全文を読む
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