A Natural Monopoly

question 102

Multiple Choice

A natural monopoly

• A) generally needs to be regulated in order to reduce allocative inefficiency.
• B) should be taken over by government and run as a crown corporation.
• C) is the best way to produce a given product and should be left alone.
• D) will not achieve productive efficiency without regulation.
• E) should be broken up into a large number of competitive firms.

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Definitions:

Total Return

The overall financial gain or loss on an investment over a specific period of time, including interest, capital gains, dividends, and distributions realized over the period.

Yield-To-Maturity

The total return anticipated on a bond if held until it matures, including all payments and interest.

Tax-Deductible

Expenses that can be subtracted from gross income to reduce the amount of income that is subject to taxation.

Bond Principle

The face value of a bond or the amount that the issuer agrees to pay the bondholder upon the maturity of the bond.