Which of the Following Would Create a Natural Monopoly

question 22

Multiple Choice

Which of the following would create a natural monopoly?

• A) An exclusive right granted to supply a good or service.
• B) A patent granted the producer of the good or service.
• C) Technology enabling a single firm to produce at a lower average total cost than two or more firms.
• D) The requirement to obtain a government licence before a firm can sell the good or service.
• E) Ownership of all the available units of a necessary input.

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Definitions:

Reciprocity

A mutual exchange of privileges or interactions between two parties, where each party provides benefits to the other with a sense of obligation.

Pluralistic Ignorance

A type of misunderstanding that occurs when members of a group don’t realize that the other members share their perception (often, their uncertainty about how to react to a situation). As a result, each member wrongly interprets the others’ inaction as reflecting their better understanding of the situation.

Car Accident

An unexpected and unintended event involving vehicles that can cause damage and injury.

Heart Attack

A medical emergency where the blood flow to a part of the heart is blocked, often by a blood clot, causing damage to the heart muscle.