Monopolies That Exist Because Economies of Scale Create a Barrier

question 9

Multiple Choice

Monopolies that exist because economies of scale create a barrier to entry are called:

• A) normal monopolies.
• B) natural monopolies.
• C) price-discriminating monopolies.
• D) government monopolies.

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Definitions:

Decrease in Dividends

A reduction in the amount paid out to shareholders from a company's earnings, often signaling a change in financial health or strategy.

Deteriorating Earnings

A condition where a company experiences a decline in profitability and earnings over time.

Dividend Income

Income received from owning shares of a company that pays dividends, which is a portion of the company's earnings distributed to shareholders.

Dividend Preference Theory

A theory that suggests investors prefer dividends over future capital gains because dividends provide certainty.