Describe how a regulator can reduce the deadweight


Describe how a regulator can reduce the deadweight loss associated with monopoly by setting a price cap in the market. Demonstrate what the ideal level of this price cap is, and the resulting inefficiency. Will this same strategy work for regulating natural monopoly? If so, discuss why; if not, discuss what strategy would work to reduce deadweight loss.

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Macroeconomics: Describe how a regulator can reduce the deadweight
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