Discuss the merits of the natural monopolist

Reference no: EM131443852

Question: Suppose an industry experiences decreasing average costs of production over the relevant range of market demand. Discuss the merits of a regulation requiring the natural monopolist to set a price where demand equals marginal cost and to service all willing customers. What about where demand equals average cost? Are any practical difficulties likely to be encountered with either regulatory program?

Reference no: EM131443852

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