Vertical Economies: The Case of U.S. Electric Utility Industry, 1983-87*

  title={Vertical Economies: The Case of U.S. Electric Utility Industry, 1983-87*},
  author={P. M. Hayashi and James Yeoung-Jia Goo and C. Chamberlain},
  journal={Southern Economic Journal},
..., the public utility industries are preeminently characterized in important respects by decreasing unit costs-or increasing returns-with increasing levels of output. That is indeed one important reason why they are organized as regulated monopolies: a "natural monopoly" is an industry in which the economies of scale -that is, the tendency for average costs to decrease the larger the producing firm-are continuous up to the point that one company supplies the entire demand. It is a reason… Expand
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