Revenue Cap Regulation


DEFINITION of 'Revenue Cap Regulation'

A form of economic regulation generally applied to utility companies. Revenue cap regulation seeks to limit the amount of total revenue received by a company operating which holds monopoly status in the industry. Like price cap regulation, revenue cap regulation is determined according to inflation, the Consumer Price Index (CPI) and the efficiency savings factor.

BREAKING DOWN 'Revenue Cap Regulation'

Revenue cap regulation stands in contrast to price cap regulation, which seeks to control the prices set by produces. It also differs from rate of return regulation, which seeks to control the rate of return earned by companies. Revenue cap regulation is designed to incentify regulated companies to increase their efficiency.

  1. Revenue

    The amount of money that a company actually receives during a ...
  2. Price Cap Regulation

    A form of economic regulation generally specific to the utility ...
  3. Operating Revenue

    Income derived from sources related to a company's everyday business ...
  4. Recurring Revenue

    The portion of a company's revenue that is highly likely to continue ...
  5. Ancillary Revenue

    Revenue generated from goods or services that differ from or ...
  6. Revenue Deficit

    When the net amount received (revenues less expenditures) falls ...
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  3. What is a profit and loss (P&L) statement and why do companies publish them?

    A profit and loss (P&L) statement, or balance sheet, is essentially a snapshot of a company's financial activity for ... Read Full Answer >>
  4. How do dividends affect the balance sheet?

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  5. Are dividends considered an expense?

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