Critics of the Regulation of Natural Monopolies Contend That

Multiple Choice

Critics of the regulation of natural monopolies contend that

A) regulation increases the incentive of firms to lower costs.
B) regulated firms may use creative accounting to reduce costs, prices, and profits.
C) when rates of return are based on the value of real capital, an uneconomic substitution of labor for capital may occur.
D) the industry may "capture" or control the regulatory commission.