The regulation of natural monopolies:
A)typically involves setting a maximum price that the monopolist can charge.
B)always causes the industry to operate at a loss.
C)eliminates deadweight loss.
D)typically involves setting a maximum quantity that the monopolist can produce.

Question

Quizplus · Accepted Answer

Regulating natural monopolies often involves setting a maximum price to prevent the monopolist from charging excessively high prices that would exploit consumers. This approach aims to make the services or goods provided by the monopoly more affordable while still allowing the company to cover its costs and earn a reasonable profit.

The Regulation of Natural Monopolies