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Rate-of-return Regulation
Rate-of-return regulation is a system for setting the prices charged by government-regulated monopolies, such as public utilities. Its main premise is that monopolies must charge the same price that would ideally prevail in a perfectly competitive market, equal to the efficient costs of production, plus a market-determined rate of return on capital. Rate-of-return regulation has been criticized because it encourages cost-padding and because if the rate is set too high, it encourages regulated firms to adopt capital-labor ratios that are too high. That is known as the Averch–Johnson effect, or simply "gold-plating." Under rate-of-return regulation, regulated monopolies have no incentive to minimize their capital purchases, since prices are set equal to their costs of production. Rate-of-return regulation was dominant in the US for a number of years in the government regulation of utility companies and other natural monopolies. Such companies, if not regulated, could easily charge f ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Public Utility
A public utility company (usually just utility) is an organization that maintains the infrastructure for a public service (often also providing a service using that infrastructure). Public utilities are subject to forms of public control and regulation ranging from local community-based groups to statewide government monopolies. Public utilities are meant to supply goods/services that are considered essential; water, gas, electricity, telephone, and other communication systems represent much of the public utility market. The transmission lines used in the transportation of electricity, or natural gas pipelines, have natural monopoly characteristics. If the infrastructure already exists in a given area, minimal benefit is gained through competing. In other words, these industries are characterized by ''economies of scale'' in production. There are many different types of public utilities. Some, especially large companies, offer multiple products, such as electricity and natu ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Averch–Johnson Effect
The Averch–Johnson effect is the tendency of Monopoly#Government-granted monopoly, regulated companies to engage in excessive amounts of capital accumulation in order to expand the volume of their profits. If companies' profits to Financial capital, capital ratio is regulated at a certain percentage then there is a strong incentive for companies to over-invest in order to increase profits overall. This investment goes beyond any optimal efficiency point for capital that the company may have calculated as higher profit is almost always desired over and above efficiency. Excessive capital accumulation under rate-of-return regulation is informally known as gold plating. Mathematical derivation Suppose that a regulated firm wishes to maximize its profit:\pi = R(K,L) - wL - rKwhere R(K,L) is the revenue function, K is the firm's capital stock, L is the firm's labor stock, w is the wage rate, and r is the cost of capital. The firm's profit is constrained such that:\sigma = where \sigm ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Standard Oil
Standard Oil Company, Inc., was an American oil production, transportation, refining, and marketing company that operated from 1870 to 1911. At its height, Standard Oil was the largest petroleum company in the world, and its success made its co-founder and chairman, John D. Rockefeller, who is among the wealthiest Americans of all time and among the richest people in modern history. Its history as one of the world's first and largest multinational corporations ended in 1911, when the U.S. Supreme Court ruled that it was an illegal monopoly. The company was founded in 1863 by Rockefeller and Henry Flagler, and was incorporated in 1870. Standard Oil dominated the oil products market initially through horizontal integration in the refining sector, then, in later years vertical integration; the company was an innovator in the development of the business trust. The Standard Oil trust streamlined production and logistics, lowered costs, and undercut competitors. "Trust-busting" cri ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
United States Supreme Court
The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that involve a point of federal law. It also has original jurisdiction over a narrow range of cases, specifically "all Cases affecting Ambassadors, other public Ministers and Consuls, and those in which a State shall be Party." The court holds the power of judicial review, the ability to invalidate a statute for violating a provision of the Constitution. It is also able to strike down presidential directives for violating either the Constitution or statutory law. However, it may act only within the context of a case in an area of law over which it has jurisdiction. The court may decide cases having political overtones, but has ruled that it does not have power to decide non-justiciable political questions. Established by Article Three of the United States C ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Munn V
Munn as a surname may refer to: *Allison Munn (born 1974), American actress *Clarence Munn (1908–1975), college football player and coach *Geoffrey Munn (born 1953), jewellery expert on the BBC's Antiques Roadshow * Gurnee Munn (died 1960), American businessman * Jack Munn, Australian rugby player * John Munn (other), several people *Kathleen Munn (1887–1974), Canadian artist * Louise Munn (born 1983), Scottish hockey player *Mancel Thornton Munn (1887–1956), American agronomist and botanist * Mark Munn (born 1953), American ancient historian * Meg Munn (born 1959), British politician *Olivia Munn (born 1980), American actress and TV personality *Orson Desaix Munn, (1824-1907), publisher of ''Scientific American'' * Robert Stewart Munn (1829–1894), Newfoundland merchant and politician * Robert Edward Munn (1919–2013), Canadian climatologist and meteorologist *H. Warner Munn Harold Warner Munn (November 5, 1903 – January 10, 1981) was an American writer of fa ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Natural Monopoly
A natural monopoly is a monopoly in an industry in which high infrastructural costs and other barriers to entry relative to the size of the market give the largest supplier in an industry, often the first supplier in a market, an overwhelming advantage over potential competitors. Specifically, an industry is a natural monopoly if the total cost of one firm, producing the total output, is lower than the total cost of two or more firms producing the entire production. In that case, it is very probable that a company (monopoly) or minimal number of companies (oligopoly) will form, providing all or most relevant products and/or services. This frequently occurs in industries where capital costs predominate, creating large economies of scale about the size of the market; examples include public utilities such as water services, electricity, telecommunications, mail, etc. Natural monopolies were recognized as potential sources of market failure as early as the 19th century; John Stuart M ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Smyth V
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Smyth is an early variant of the common surname Smith commonly found in Ireland.Citation: Bardsley, 1901 Shown below are notable people who share the surname "Smyth". Notable people sharing the Smyth surname Listed here are people who share the 'Smyth' surname, organized by birth year. Families * Smyth baronets, several independently created British hereditary titles * Bowyer-Smyth baronets, holders of a single British hereditary title Smyth disambiguation pages * John Smyth (other) * Richard Smyth (other) * William Smyth (other) Notes Other uses * Smyth County, Virginia References * See also * Smith (other) * Smythe (other) * Smith (surname) Smith is an occupational surname originating in England, Scotland, and Ireland. It is the most prevalent surname in the United Kingdom, the United States, Australia, Canada, and New Zealand, and the fifth most common surname in the Republic of ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
