42. To ensure that utilities receive a normal rate-of-return, regulators set price equal to: a. Marginal costs b. Short-run average variable costs c. Long-run average variable costs d. Demand
42. To ensure that utilities receive a normal rate-of-return, regulators set
a. Marginal costs
b. Short-run
c. Long-run average variable costs
d. Demand
43. Which of the following statements about electricity is correct?
a. Electricity is a primary source of energy.
b. There are two stages – generation and transmission- necessary to get the electricity
from the utility provider to the final customer.
c. A unique aspect of electricity is that demand must equal supply at each instant.
d. Regulated utilities do not maintain excess generating capacity.
44. Why does the
capital investment from the regulated utilities companies?
a. A state government directly subsidies capital investments.
b. The capture effect rewards capital investment more than other types of investment.
c. The RoR is applied to the rate base, which includes capital but not operating costs.
d. Regulator salaries increase as capital increases.
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