Assume a natural monopolist is required to use marginal cost pricing and a government subsidy covers the loss. What problems might be associated with a public subsidy? Do you agree that “cost does not...

Assume a natural monopolist is required to use marginal cost pricing and a government subsidy covers the loss. What problems might be associated with a public subsidy?

Do you agree that “cost does not really matter” as a principle for safety regulation, or do you believe that the cost of a safety device must be justifi ed on the basis of the value of human life protected from a hazard?