Compared with the profit-maximizing choice of a natural monopolist,output regulation will result in a

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Output regulation aims to increase the output level of a natural monopolist while keeping the price at a lower level. This is achieved by imposing a cap on the price that the monopolist can charge to ensure that the customers are not exploited. As a result, the monopolist will increase the output level to meet the demand at the regulated price, causing a higher level of output and a lower price compared to the profit-maximizing choice.

Compared with the Profit-Maximizing Choice of a Natural Monopolist,output Regulation