 Depreciation costs rise due to the fact that as a firm obtains more capital, that physical capital will depreciate over time, therefore raising the overall depreciation cost.In order to subvert the system, regulated-monopolies can purchase capital they don't necessarily need or use, which will be left in the factory merely to depreciate, thereby raising their regulated price level as allocated by the government.The right of states to prescribe rates was affirmed in the United States Supreme Court case of "Munn v. Illinois" of 1877.