Can governments regulate how much profit margin companies can have?

Question

I keep seeing comments about how companies are having record profits, and consumers are paying for inflationary prices. Can governments regualte profit margins as a form of consumer protection?

In: 0

Answer 1

In the UK the domestic energy suppliers are private companies but the profit margin they are allowed to make is capped (I think at 2%).

It falls down though because these energy “retailers” still have to pay the energy “producers” the going wholesale price and often these are just different arms of the same company.