Author Question: The rate-of-return regulated public utility can have incentive to use more capital than is efficient ... (Read 66 times)

tfester · **on:** Jul 1, 2018

The rate-of-return regulated public utility can have incentive to use more capital than is efficient relative to other inputs.

Indicate whether the statement is true or false

Question 2

The ______________ Resource Model illustrated in the book shows the interdependence of resources, how they exchange.

a. Foa & Foa
b. Elbing
c. Hertford & Myers
d. Eccles & Ward

recede · **Reply #1 on:** Jul 1, 2018

Answer to Question 1

T The rate-of-return regulated public utility earns profit based on how much capital it uses, and if the return it is allowed to earn per unit of capital exceeds its cost of capital, which is usually the case, it will want to use more capital so it can keep more profit.

Answer to Question 2

A