Faced with limited energy resources and soaring energy demand arising from rapid economic growth, Taiwan has to import a substantial amount of energy. In 1983, 88 percent of its total energy requirement (35.54 million kiloliters of oil equivalent) was imported. Since this heavy dependence will...

This paper examines a utility's behaviour under the regulatory constraint of a maximum allowable rate of return. The golden rule of production efficiency, i.e. that the marginal productivities of the input factors are equal, is used as our criterion to examine the utility's economic behaviour....