If the Distribution of Water Is a Natural Monopoly, Then

question 494

Multiple Choice

If the distribution of water is a natural monopoly, then (i)
Multiple firms would likely each have to pay large fixed costs to develop their own network of pipes.
(ii)
Allowing for competition among different firms in the water-distribution industry is efficient.
(iii)
A single firm can serve the market at the lowest possible average total cost.

• A)(i) and (ii) only
• B)(ii) and (iii) only
• C)(i) and (iii) only
• D)(iii) only

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Zero Coupon Bond

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The nominal value printed on a financial instrument like a bond or stock certificate, not necessarily its market value.

Interest Rate

The interest rate is the proportion, typically expressed as a percentage, at which interest is paid by borrowers for the use of money that they borrow from a lender.

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The immediate value of a forthcoming sum of money or cash flow streams, discounted at a specific rate of return.