Question

Natural monopolies in the united states are generally regulated by

Answer 1

Natural monopolies in the U.S. are regulated by the government to prevent abuse of market power and ensure fair pricing and supply, especially in industries like water and electricity where such monopolies are common due to their high fixed costs.

Step-by-step explanation:

Natural monopolies in the United States are generally regulated by government entities to manage and oversee industries that exhibit characteristics of a natural monopoly. These monopolies often arise in industries where the fixed costs are substantial compared to the variable costs, leading to a situation where a single firm can supply a product or service at a lower total cost than if there were multiple competitors in the market. Examples of industries with natural monopolies include utilities such as water and electricity. Regulation is crucial because without it, these monopolies could potentially abuse their market power by charging excessive prices or restricting supply. The intervention began in the late 1800s with the government enacting laws to break up monopolies and regulate key industries, shaping the competitive landscape we see today.

Answer 2

Natural monopolies like electric companies and water companies are regulated by the local or state regulatory commission or agency. Natural monopolies occur when one firm or company can cater the demand of the entire market at the lowest cost. For example, in one state, a company who will provide electricity to the entire state is thus regulated in the state where it does business.