This chapter examines some of the optimal policies that are used to control a natural monopoly. Although the traditional view suggests that government intervention and natural monopoly go hand in hand, economic analysis since the late 1960s has suggested rather forcefully that there are ways to...

and Statement of Purpose -- 1 The Inefficacy of Profit Level Regulation for the Natural Monopoly Markets of Diversified Firms -- A. An Economic Overview -- B. A Legal Overview -- 2 The Welfare Ingredients of Price Level Regulation: Incentives and Decisional Options -- A. The Firm’s Incentives...