The Regulation Change And Effective Competition Of Natural Monopoly Industry

The regulation and competition of natural monopoly industry have become an important research field in economics since the 1970's. In the past 30 years, developed and developing countries have performed the market-oriented reform in the field of power, telecommunication, aviation, railroad by means of de-regulation, re-regulation and the effective competition. These reform movement provides us a lot of experiences and lessons that are used to constitute the theory background and the positive background of this paper.This paper begins with two dilemmas: (1) the entrance regulation leads to Marshall ' s dilemma, which means that the characteristics of natural monopoly and economies of scale require government give some limitations on entrance and management of this kind of enterprises, but often result in low efficiency and backward technology; (2) the price regulation causes awkward pricing, because one of the basic characteristics of the natural monopoly industry is MC