The stated reason for resorting to regulation of public utilities rather than promoting competition through antitrust is that the industry in question is believed to be a:
A) profit-maximizing monopoly.
B) natural monopoly.
C) revenue-maximizing monopoly.
D) producer of externalities.

Question

Quizplus · Accepted Answer

The reason for resorting to regulation of public utilities is because they are believed to be natural monopolies where competition is not feasible due to high fixed costs and economies of scale in production. Antitrust laws are not effective in addressing natural monopolies as they do not create competition.

The Stated Reason for Resorting to Regulation of Public Utilities