In the case of a natural monopoly where cost conditions lead to a sole supplier, regulation is used to ensure that

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Regulation is used to ensure that price and output are more beneficial for consumers than would be the case without government interference. This helps to prevent the natural monopolist from exploiting their market power and charging excessively high prices or restricting output, which could harm consumers. It is important to note that competition cannot be enhanced in a natural monopoly situation, as cost conditions lead to a sole supplier. Oversupplying the market, attempting to increase market share or expanding internationally are also not relevant to regulating a natural monopoly.

In the Case of a Natural Monopoly Where Cost Conditions