The Rate-of-Return Regulated Firm: Cost and Production Duality

A duality between cost and production is established for a firm subject to rate-of-return regulation. To this end, a rate-of-return regulated production function is defined and shown to exist. It is then shown how information regarding the unregulated technology can be obtained from the rate-of-return regulated cost function. With knowledge of the rate-of-return constraint, the rate-of-return regulated production function can be reconstructed.