Public policy toward monopolies Suppose that the government is concerned that an electric utility company is taking advantage of consumers with unfair pricing policies. The government views electricity as a public good that is likely to be produced inefficiently by the private sector. Which of the following policy options might most effectively enable the government to achieve its objectives in this situation?

1. Regulate the pricing behavior.

2. Do nothing at all.

3. Turn the company into a public enterprise.

4. Use the law to increase competition.