Resource Allocation and the Regulated Firm: Comment on the Comments
Volume: Volume 4, No. 1
Issue: Spring 1973
Pages: pp. 288-292
Authors: Elizabeth E. Bailey
Title: Resource Allocation and the Regulated Firm: Comment on the Comments
Abstract: The revenue-maximizing firm presumably has an internal return requirement that is at least as large as the maximum return permitted by a regulatory agency. In this case, which is the only one that seems economically meaningful, the undercapitalization result of Bailey-Malone holds throughout the elastic region of the revenue curve.
JEL Classification
Regulation of Public Utilities (6130)