 This regulation is considered fair due to the fact that they give the company the opportunity to recover costs incurred by providing consumers with their goods or services while simultaneously protecting consumers from paying exorbitant prices that would provide these companies with monopolistic profits.Under this method of regulation, government regulators examine the firm's rate base, cost of capital, operating expenses, and overall depreciation in order to estimate the total revenue needed for the firm to fully cover its expenses.The goal of rate-of-return regulation is for the regulator to evaluate the effects of different price levels on potential earnings for a firm in order for consumers to be protected while ensuring investors receive a "fair" rate of return on their investment.