Consider a local public utility, such as the water utility or scavenger company, that is regulated. Provide a diagram or graph illustrating the typical price and output set by regulators. Then respond to the following questions:

1. What might happen if the company was not regulated?
2. To what extent does regulation lead to equilibrium price and output levels that are consistent with production and allocation efficiencies?
3. Do you think the local community would be better served if the industry was no longer regulated and entry was available to any other company wanting to serve the community?