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As there are natural monopoly market situations it is in the public interestto permit monopolies, but traditionally in the United States they are regulated with respect to price. The purpose of the rate regulation was to make sure that the public would not suffer price gouging as a result of the monopoly position of the firms. Some examples of regulated natural monopolies are electric utilities, cable TV companies, and telephone companies (local).
1- Explain how a policy mix (like the one used in 1990s) could help reduced to eliminate the budget deficit without having an adverse effect on the output. Illustrate your answer
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If demand goes down what happens to the equilibrium?
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