This paper develops a model of capacity utilization in an industry where price and entry are regulated. The distinctive feature is that capacity affects waiting time of consumers, and, therefore, influences demand. The result is that capacity utilization, output, and costs are jointly determined...

Decontrol of the wellhead price of natural gas under the Natural Gas Policy Act of 1978 ended the general shortage of natural gas, which had begun in the 1960s. It also led to dislocations in gas markets because of regulatory uncertainties that created difficulties in renegotiating contracts...