A monopolist facing a market of heterogeneous consumers will not only distort the quality array but also get a possibility of excluding the low quality consumer out of market. Bacause social welfare decreased, these are critical problems on the self-selection problem. This thesis explores five regulatory remedies-rate of return regulation, minimum quality standards, maximum price regulation, price cap of RPI-X profit regulation-that counteract this distortion and possibility of exclusion. The excellent remedies to these problems are profit regulation and maximum price regulation. Unfortunately the price cap of RPI-X reinforces these problems.
