The Public Interest Theory of Regulation Stipulates That Government Regulation

question 170

Multiple Choice

The public interest theory of regulation stipulates that government regulation of a natural monopoly is necessary in order to achieve all of the following, except

• A) preventing the natural monopoly from harming society through its monopoly pricing.
• B) garnering for society at least part of the cost reductions from being a natural monopoly.
• C) avoiding the reduction in output associated with monopoly power.
• D) eventually breaking up the monopoly to achieve competition within the industry.

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