When confronted with a natural monopoly that restricts output and charges monopoly prices,
When confronted with a natural monopoly that restricts output and charges monopoly prices, the two methods that governments have for promoting better outcomes are:
a. Public ownership and public regulation.
b. Sole proprietorships and public goods.
c. Antitrust law and horizontal mergers.
d. Creative destruction and laissez-faire.
4. Which of the following is the correct name for the idea that certain firms prefer government regulation because regulation shields them from the pressures of competition and, in effect, guarantees them a regulated profit?
a. The public interest theory of regulation.
b. The Structuralists’ theory of monopoly.
c. The legal cartel theory of regulation.
d. The public regulation theory of natural monopoly.