Which of the following types of economic regulation is most likely to encourage a natural monopoly to NOT inflate its costs?
A) average cost pricing rule
B) rate of return regulation
C) price cap regulation
D) None of the above encourages cost cutting.

Question

Quizplus · Accepted Answer

Price cap regulation sets a maximum price that a monopoly can charge, incentivizing the firm to reduce costs to increase profits.

Which of the Following Types of Economic Regulation Is Most