Regulation public utilities

4 important questions on Regulation public utilities

How does price regulation work?

LET OP

What are de conditions of perfect competition?

  • No information asymmetries
  • Small producers
    • relative to market size
    • act independently
  • Homogeneous products
  • No barriers to entry
  • Buyers act independently

What are the determinants of market concentration?

  • Economies of scale (average cost decreasing with production)
  • Network effects (attracting critical masses)
  • Abusive barriers to entry (margin squeeze, advertisements)
  • Legal barriers (licensing)
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What are the regulatory concerns for public utilities?

  • Fostering efficiency (allocative and dynamic)
  • facilitating investment and managing long-term contracts
  • internalities and knowledge problem

The question on the page originate from the summary of the following study material:

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