A regulated utility often cites the need for a minimum return on investment when making rate-increase requests. This illustrates the use of
A) profit-based objectives.
B) sales-based objectives.
C) status quo-based objectives.
D) skimming pricing.

Question

Quizplus · Accepted Answer

Regulated utilities need to ensure they can cover their costs and make a reasonable profit to continue operations and investments. Citing the need for a minimum return on investment when requesting rate increases is an example of setting profit-based objectives. They aim to secure enough revenue to meet their financial goals, which is characteristic of profit-based pricing strategies.

A Regulated Utility Often Cites the Need for a Minimum