Models of Regulation as Tool for Risk Elimination in Network Industry Markets in Slovakia
In Slovakia in the recent period of time we have seen an intensive discussion concerning the effectiveness of the price regulation methods in Network Industries and the objectivity and the labour social effectiveness of The Regulatory Office for Network Industries, as well. It is understandable as network industries in fact ensure the production and distribution of energy sources which play a key role in an effective operation of the developed economies. The discussions are usually focused on the question of a reasonable profit of the network industries companies and on the other hand on the question of prices which are determined by the reasonable and generally acceptable costs of their production. In relation with objectification and increases in nationwide operation effectiveness of natural monopolies in network industries† on the market the role of regulation mechanisms is increasing. Its aim is the closest approximation of proportions between price and level of network industry products supply to the situation which would occur in the conditions of market competition. In the paper we will analyze analytical scheme for monopoly price regulation – rate of return regulation.