One reason why it is difficult to regulate a natural monopoly is

Question

Quizplus · Accepted Answer

The information problem arising due to the monopoly's managers having an incentive to overstate costs makes it difficult to regulate a natural monopoly. It can be challenging to determine the actual costs incurred, which may affect the determination of the appropriate pricing strategy. Therefore, regulatory bodies face difficulty in regulating the monopoly to provide optimal benefits to consumers.

One Reason Why It Is Difficult to Regulate a Natural