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The objective of this study is to measure the effectiveness of the regulatory process in reducing prices to residential users of electrical utilities. In it, the marginal cost for 62 private electric companies and 7 municipal ones are computed and the demand curves facing them are estimated. From these curves the profit-maximizing prices, p,, are estimated and compared with the actual prices charged to indicate the effectiveness of regulation. Short run marginal cost is estimated using Federal Power Commission cross sectional
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