In the Case Where a Natural Monopoly Exists in an Industry

question 256

Multiple Choice

In the case where a natural monopoly exists in an industry,

• A) a competitive market structure will be costly and difficult to maintain.
• B) a competitive market structure will be more efficient and more equitable.
• C) government regulations will always improve efficiency in this industry.
• D) economies of scale will not be a consideration when analyzing the proper structure of the industry.

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Definitions:

Payroll Deductions

Monies withheld from an employee’s paycheck by the employer for taxes, insurance premiums, retirement fund contributions, and other purposes.

Weekly Payroll

The total amount of money a company pays to its employees on a weekly basis.

Warranty Period

The length of time during which a manufacturer promises to repair or replace defective products at no charge to the customer.

Estimated Warranty Expense

Estimated Warranty Expense is an anticipated cost a company expects to incur related to its product warranties, predicting repairs or replacements it will provide for products sold within a given period.