Home > Terms > English, UK (UE) > Rate of return regulation
Rate of return regulation
An approach to regulation often used for a public utility to stop it exploiting monopoly power. A public utility is forbidden to earn above a certain rate of return decided by the regulator. In practice, this often encourages the utility to be inefficient, slow to innovate and quick to spend money on such things as big offices and executive jets, to keep down its profit and thus the rate of return. Contrast with price regulation.
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- Part of Speech: noun
- Synonym(s):
- Blossary:
- Industry/Domain: Economy
- Category: Economics
- Company: The Economist
- Product:
- Acronym-Abbreviation:
Other Languages:
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