The major problem with price efficiency regulation is that the natural monopolist loses money or earns negative profits.

Question

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Price efficiency regulation often requires the natural monopolist to set prices at a level where they only earn a reasonable rate of return on their investment, rather than the maximum profit. This can result in a decrease in their overall profits or even negative profits, which is a major challenge for the natural monopolist.

The Major Problem with Price Efficiency Regulation Is That the Natural