We show in a simple model of entry with sunk cost, that a regulator prefers limiting the output, or capacity, of the incumbent firm rather than imposing a "Minimum Quality Standard" in order to help the entrant to provide high quality. As a by-product, our analysis makes a contribution to the...

Many economists are aware that the conditions for the efficiency and monopolization in a partial equilibrium framework are the extremes of the Ramsey–Boiteux formula when the Lagrange multiplier for the budget varies. We formalize the duality existing between the welfarist and monopolist...