0 used to describe businesses, services, agreements, etc. that do not have to obey official rules:
For an example of the former, consider a firm operating both as a regulated monopoly and in a non-regulated market.
By non-regulated market we mean a market only subject to ordinary competition regulation where the degree of competition may vary.
Often, these definitions involve public firms that have regulated monopolies, but also compete in non-regulated markets.
By sustaining the original prices in the non-regulated market, the firm will increase its profit in this market without being predatory.
In the non-regulated market, the firm has no profit regulation.
Under these conditions, the firm can make tacit cost transfers from the non-regulated to the regulated market without an accompanying price reduction.
The cross-subsidy will allow the firm to operate at market prices in the non-regulated sector and lead a ' 'quiet life' '.
Finally, the cost transfer could be used to cover up inefficiency by concealing that the regulated firm would be unable to recover costs in the non-regulated market at market prices.
