Asked by Jordan Jeyachandran on Jul 21, 2024
Verified
Which of the following is characteristic of a regulated natural monopoly?
A) extensive economies of scale
B) the wasteful duplication of capital facilities in the event of competition
C) the provision of an essential service
D) all of these
Natural Monopoly
is a situation where a single firm can supply a product or service to an entire market more efficiently than could multiple competing firms, often due to high fixed costs.
Economies of Scale
Refers to the cost advantages that enterprises obtain due to their scale of operation, leading to a reduction in per-unit cost.
Capital Facilities
Physical assets such as buildings, machinery, and equipment used in the production of goods and services.
- Understand the principles and criticisms of industrial regulation, including the rationale for regulating natural monopolies.
- Understand the concept of natural monopoly and the government's approach to regulation.
Verified Answer
Learning Objectives
- Understand the principles and criticisms of industrial regulation, including the rationale for regulating natural monopolies.
- Understand the concept of natural monopoly and the government's approach to regulation.
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