The rate-of-return regulated public utility can have incentive to ...

[Alainaaa8]

The rate-of-return regulated public utility can have incentive to price some services too high and others too low, relative to efficient prices.
 
  Indicate whether the statement is true or false

Question 2

_________ is the value, worth, applicability, productiveness or usefulness of a resource.
 
  a. Utility
  b. Marketability
  c. Credit
  d. Cache

[Chou]

Answer to Question 1

T As in its tendency to favor capital over other inputs, the rate-of-return regulated public prefers to sell services that require more capital. So it may set the price of a peak-load service low in order to create more demand for capital, and price off-peak service high to make profit that the capital can be used to justify.

Answer to Question 2

A