Price Cap Regulation
/ˈpraɪs kæp ˌrɛɡjʊˈleɪʃən/
Definitions
- (n.) A regulatory method that sets a maximum allowable price level for a product or service, typically to protect consumers in monopolistic markets.
The price cap regulation imposed limits on the utility company's charges to prevent excessive consumer costs.
- (n.) A form of economic regulation used primarily in telecommunications and energy sectors to incentivize efficiency by allowing firms to keep profits below set limits.
Under price cap regulation, the telecom provider was motivated to reduce costs while keeping prices within the capped limit.
Forms
- price cap regulation
- price cap regulations
Related terms
See also
Commentary
Price cap regulations differ from cost-based approaches by focusing on price limits rather than directly regulating costs, encouraging efficiency improvements by regulated firms.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.