Price Regulation Flashcards
1
Q
What are the two types of price cap?
A
RPI + K
RPI - X
2
Q
What is RPI in these equations used to do?
A
how much one can increase prices by, in line with inflation
3
Q
RPI + K
A
how much one can increase prices by, RPI, + additional price increases to allow investment
4
Q
RPI - X
A
lazy and inefficient firms forced to reduce costs as regulators force them to decrease prices (-X)
5
Q
What is RPI equal to?
A
inflation
