An electric power company regulated by the state is a monopoly enterprise. 1Suppose the regulator sets the price to reflect what the market will look like if it is competitive. 2Now suppose that the government wants to loosen its control on electricity and let it freely determine the electricity price it charges. How will this affect the demand of power companies for labor in the short term? If appropriate, please explain with illustrations.

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1 Regulated Monopoly Pricing When the regulator sets the price to reflect what the market would look like under competitive conditions the electric po... View the full answer