Final answer:
Regulations can both increase or decrease the market power of power plants that already exist, depending on the specific regulations in place.
Step-by-step explanation:
Regulations can both increase or decrease the market power of power plants that already exist, depending on the specific regulations in place. For example, if regulations impose price caps that are set too low, power plants may struggle to meet the caps and incur losses.
On the other hand, if regulations promote competition by encouraging power plants to compete with prices charged in other areas, it can decrease the market power of existing power plants.