Consumer Surplus: An Incentive Subsidy
- 41 Downloads
The incentive regulation plans adopted by state regulators and reviewed in the last chapter focus on the firm’s expenditures. If the firm reduces its expenditures (either absolutely or relative to its revenues), the incentive schemes give it a share of those savings. The last chapter looked at the specific elements of those plans and how those elements make the plans more or less effective as incentive mechanisms.
KeywordsMarginal Cost Moral Hazard Consumer Surplus Incentive Regulation Marginal Cost Price
Unable to display preview. Download preview PDF.