One way that natural monopolies are typically regulated is

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Natural monopolies are regulated by setting a price that gives owners a "fair rate of return". This is because natural monopolies have very high fixed costs and can result in a situation where competition is not feasible. Therefore, these firms are regulated to ensure that they do not exploit the market power they possess and instead, provide services to consumers at a reasonable price. The regulation through setting a "fair rate of return" ensures that the firm earns a return that is enough to cover their costs and incentivizes them to continue providing the service, while also ensuring that consumers are not charged excessive prices.

One Way That Natural Monopolies Are Typically Regulated Is