Regulating "natural monopolies" according to the "rate of return" criterion is likely to

Question

Quizplus · Accepted Answer

Regulating natural monopolies by rate of return typically leads to increased output compared to an unregulated monopoly, as it limits the firm's ability to set excessively high prices, encouraging them to produce more to earn a fair return on investment. However, it may not necessarily minimize costs or eliminate welfare loss completely.

Regulating "Natural Monopolies" According to the "Rate of Return" Criterion