Regulation of a natural monopoly that forces it to price and produce as if it were a competitive firm results in

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Regulation of a natural monopoly that forces it to price and produce as if it were a competitive firm will result in economic losses for the monopoly. This is because natural monopolies typically have high fixed costs and low marginal costs, and in a competitive market, they would have to lower their prices to match the competition. This would reduce their profits and could even lead to losses if they are unable to cover their fixed costs. Therefore, regulation to create a competitive market may result in short-term losses for the monopoly, but it can also benefit consumers in the long-term by promoting lower prices and increased efficiency.

Regulation of a Natural Monopoly That Forces It to Price