Some Consider the Local Cable Industry to Be a Natural

question 31

Essay

Some consider the local cable industry to be a natural monopoly. If the cable industry is under incentive regulation, what would be the effect of introducing competitive satellite TV? What should the cable regulatory agency do?

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Definitions:

Inelastic Good

A product or service whose demand does not significantly change with a change in its price, indicating consumers' necessity or lack of substitutes.

Gasoline Expenditures

The total amount of money spent by consumers on gasoline, encompassing both retail purchases for vehicles and other uses.

Public Transportation

A system of vehicles such as buses, trains, and subways, provided by the government or private companies, for the purpose of transporting large numbers of people.

Cross-price Elasticity

Measures the responsiveness of the demand for one good to a change in the price of another good.