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CIMAPRA19-F03-1 Exam - Topic 7 Question 121 Discussion

Actual exam question for CIMA's CIMAPRA19-F03-1 exam
Question #: 121
Topic #: 7
[All CIMAPRA19-F03-1 Questions]

A company generates and distributes electricity and gas to households and businesses.

Forecast results for the next financial year are as follows:

The Industry Regulator has announced a new price cap of $2.00 per Kilowatt.

The company expects this to cause consumption to rise by 15% but costs would remained unaltered.

The price cap is expected to cause the company's net profit to fall to:

Show Suggested Answer Hide Answer
Suggested Answer: B

by Michael at Mar 08, 2026, 12:47 PM

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Staci
15 days ago
Wait, how can costs stay the same with rising demand?
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Zana
20 days ago
I think consumption rising by 15% will help offset some losses.
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Ceola
26 days ago
Price cap at $2.00 per Kilowatt is a big change!
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Jody
1 month ago
I’m leaning towards option B, $164 million profit.
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Kimberlie
1 month ago
Totally agree, profit will definitely take a hit.
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Douglass
1 month ago
Really? A 15% rise in consumption but no cost changes? Sounds off.
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Amber
2 months ago
I think the profit will drop significantly.
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Gracia
2 months ago
Price cap at $2.00 per Kilowatt, wow!
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Louvenia
2 months ago
I think I recall that with the price cap, the profit could actually decrease despite higher consumption. I’m torn between options A and C, though.
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Bronwyn
2 months ago
I feel a bit uncertain about how the unchanged costs play into this. If consumption rises, wouldn't that typically mean more revenue?
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Valentin
2 months ago
This question seems similar to one we practiced where we had to adjust profits based on changes in pricing and demand. I think I might lean towards option B, but I need to double-check my calculations.
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Brunilda
2 months ago
I remember we discussed how price caps can affect profit margins, but I'm not sure how to calculate the new profit with the increased consumption.
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