Abstract
This paper disproves the regulation theory by Baron and Myerson. Their definition of welfare has cancelled out the regulation, i.e., subsidy or taxation, variable. This paper then shows how a power-thirsty regulator can be fooled to abet the monopolist to cheat for more profit, at the expenses of the society, financially. This paper argues against the measure of consumer’s surplus, and any theory based on marginal cost.
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