Question

Say the town of Manchester has regulated its water utility so that it covers the cost of its production for its water and also adds a 20% profit to the price it charges its customer. What would this regulation example be considered

Answer 1

Cost plus regulation

Step-by-step explanation:

A Cost-plus regulation can be explained to be a government regulation of a business which sets the price that this business can charge over a period of time by checking the businesses accounting costs and after which it adds a normal rate of profit.

The town of manchester has regulated it's water utility in this regard by covering cost of production and also adding a normal rate of 20% profit to a customer's charge.