When a firm is regulated so that its price enables it to earn a ...

[vinney12]

When a firm is regulated so that its price enables it to earn a specified target percent return on its capital, the regulation is called
 
  A) rate of return regulation.
  B) price cap regulation.
  C) earnings limited regulation.
  D) target pricing regulation.

Question 2

Many people have bemoaned the fact that hand-written personal letters have become largely a thing of the past.
 
  They have also noted that the number of emails they receive have increased quite dramatically and can hardly be compared to the volume of letters that they used to receive by mail. Explain in terms of opportunity cost why this might be the case. Explain why junk email is probably more of a problem than traditional junk mail delivered to our mail box.

[swimkari]

Answer to Question 1

A

Answer to Question 2

The opportunity cost of sending an email is much lower than writing and sending personal hand-written letters. First, there is no postage required for sending an email and secondly copies of an email can be easily and effortlessly made to send to many more recipients. The same is true for junk email. It is relatively costless to reproduce a letter sent via email whereas the cost of printing, distributing and mailing traditional junk mail is much higher.