Assertion: monopolist's incentive | /r/CapableOf | keep cost
Facets:
Source sentences:
text: Difficulties encountered when regulators try to implement average cost pricing include difficulties in calculating costs, eroded incentives for regulated firms to keep costs down, and the risk that the regulatory agency will make decisions on a political basis rather than on an economic basis.
text: Consumers will end up paying more because if a natural monopoly is guaranteed a certain rate of profit, it will have little incentive to hold its costs down.
text: A regulated natural monopolist that is allowed to earn a “fair and reasonable” rate of return has no incentive to keep costs down, because reducing costs won’t allow them to earn higher profits as a result.