Price Caps

Price caps are limits set by regulators on the maximum price a company can charge for a product or service. They are used to protect consumers from excessively high prices while allowing companies to cover their costs and earn a reasonable profit. Price caps are common in industries like utilities or transportation, where monopolies or limited competition might otherwise lead to unfair pricing. By setting a cap, regulators aim to balance fair consumer access with the company's financial sustainability, encouraging efficiency and preventing price gouging.