ECO2023 Chapter 13 Discussion Questions a) Define natural monopoly. (25pts) b) Why might the government want to regulate a natural monopoly? (25pts) c) What are three different ways a government regulate a natural monopoly? (25pts) d) Suppose the local government has decided to regulate the local power company through price regulation. What condition must the government impose on the power company's pricing? Will the natural monopolist generate positive economic profits, a loss, or break even from the price regulation? Will the government need to provide a subsidy to the natural monopolist for this regulation option to be viable? (25pts)