Which of the Following Statements Is TRUE

question 160

Multiple Choice

Which of the following statements is TRUE?
I. Government ownership is a potential solution to the natural monopoly problem but it stifles innovation.
II. Regulated monopolies have little incentive to reduce costs, as they simply pass the higher costs on to consumers.
III. Government ownership of utilities worked well for several decades.

• A) I only
• B) II only
• C) I and II only
• D) I, II, and III

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Definitions:

Net Advantage

The overall financial benefit gained from a particular investment or business decision, considering all relevant costs and revenues.

Variable Production Costs

Costs that change in proportion to the level of production output, such as raw materials and direct labor.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.

Revenue

Revenue is the total amount of income generated by the sale of goods or services related to a company's primary operations.