Question

How could a regulatory commission induce a public utility company to operate as a perfect competitor on the long run? To what difficulty would this lead? What compromise does a regulatory commission usually adopt? What does PSC stand for?

Answer 1

A government regulatory commission induce a public utility company to operate as a perfect competitior on the long run:-

Government regulation influences the utilities sector in the United States. The great numbers of all American consumers get their utilities services from private companies that are managed at the state level by public service commissions. Larger federal or state power utilities are operate directly by the government, as are many rural and municipal utilities.

There are mostly almost no areas in the total utilities market that are not burdened by government regulation. In many sectors, government agencies manage the prices utility companies charge their customers, their budgetary process, their capabilities to construct new facilities, the services they are permitted to offer, and their energy efficiency programs.

Difficulty would lead:- Most real monopolies today in the U.S. are controlled natural monopolies. A natural monopoly faces a difficult challenge for competition policy, because the structure of costs and demand seems to make competition unlikely or costly. A natural monopoly happens when average costs are decreasing over the range of production that satisfies market demand. This mostly happens when fixed costs are large relative to variable costs. As a result, one firm is capable to supply the total quantity demanded in the market at minimum cost than two or more firms—so breaking up the natural monopoly would increase the average cost of production and charge customers to pay more.

PSC:- Program Support Center

The Program Support Center (PSC) is a multi-function shared service provider to the federal government. Hosted by the U.S. Department of Health and Human Services (HHS), PSC gives their support services focused on their wants— so they can focus on their main missions.