标题: Rate of Return vs Cost of Service Regulation [打印本页] 作者: Sunshine4ever 时间: 2011-7-13 14:20 标题: Rate of Return vs Cost of Service Regulation
Can someone please explain the concept of these to me, I just don't get it.作者: hassan 时间: 2011-7-13 14:20
RoR = must establish a fair, conservative price
Cost of Service MC = make monopolist produce at marginal cost; must provide subsisidy so they don't go out of business
Cost of Service AC = make monopolist produce at average cost; you'll have more deadwight loss than you would under Cost of Service MC but at least no subsisidy is needed作者: Pegasus2008 时间: 2011-7-13 14:21
RoR = provide fair return to company (say 10-15% ROE) and determine customer rates based on this return. Work backwards up the income statement to determine revenue needed to provide such a return and base customer rates on this number. think electric utility regulation作者: RepoToronto 时间: 2011-7-13 14:21
