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Case
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Reference no. 596-033-1
Subject category: Marketing
Authors: Cezley I Sampson (Arthur Lok Jack Graduate School of Business)
Published in: 1996

Abstract

The case focuses on the impact of government regulation on the activities of monopoly suppliers. In the case, however, the monopolist in question - the Jamaica Public Service (JPS), monopoly supplier of electricity - is owned by the Jamaican Government. Since 1966, when the first rate board was set up within the Public Utilities Commission, the JPS had to seek government permission for increases in electricity prices. Even after the 1975 nationalisation of the company, the requirement of government approval for rate increase continued, simply shifting from the PUC whose office was abolished after nationalisation to the office of the Minister of Public Utilities. The challenge faced by JPS was how best to price its product. This marketing decision had to be made in the context of the need to generate sufficient funds for investment and the government budget, while recognising that high profits would enrage the public, put pressure on the Ministry of Public Utilities for tighter price regulation, and place pressure on the government to consider alternate forms of ownership for the electricity supply function.
Location:
Industry:
Size:
2,500 workers
Other setting(s):
1985

About

Abstract

The case focuses on the impact of government regulation on the activities of monopoly suppliers. In the case, however, the monopolist in question - the Jamaica Public Service (JPS), monopoly supplier of electricity - is owned by the Jamaican Government. Since 1966, when the first rate board was set up within the Public Utilities Commission, the JPS had to seek government permission for increases in electricity prices. Even after the 1975 nationalisation of the company, the requirement of government approval for rate increase continued, simply shifting from the PUC whose office was abolished after nationalisation to the office of the Minister of Public Utilities. The challenge faced by JPS was how best to price its product. This marketing decision had to be made in the context of the need to generate sufficient funds for investment and the government budget, while recognising that high profits would enrage the public, put pressure on the Ministry of Public Utilities for tighter price regulation, and place pressure on the government to consider alternate forms of ownership for the electricity supply function.

Settings

Location:
Industry:
Size:
2,500 workers
Other setting(s):
1985

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