Legislation designed to regulate natural monopolies would be based on which theory of regulation?
A) social
B) legal cartel
C) public interest
D) price-fixing

Question

Quizplus · Accepted Answer

Legislation designed to regulate natural monopolies is based on the public interest theory of regulation, which suggests that regulation is necessary to protect consumers from exploitation and to ensure that natural monopolies operate in the best interest of society as a whole. This theory assumes that natural monopolies have significant market power that could lead to abuses, and that regulation is necessary to prevent such abuses and to promote fair competition. The other options, such as the social theory, legal cartel theory, or price-fixing theory, do not provide a good explanation for the rationale behind regulating natural monopolies.

Legislation Designed to Regulate Natural Monopolies Would Be Based on Which