 Price-cap regulation attempts to do the same thing but for prices, rather than revenue.The system is intended to provide incentives for efficiency savings, as any savings above the productivity factor (this predicted rate of efficiency is commonly called the X-factor) can be passed on to shareholders, at least until the revenue caps are next reviewed (usually every five years).A key part of the system is that the X-factor is based not only a firm's past performance, but on the performance of other firms in the industry