The Two Alternative Ways of Promoting Better Outcomes When a Natural

question 6

Multiple Choice

The two alternative ways of promoting better outcomes when a natural monopoly exists are

• A) subsidy and taxation.
• B) public ownership and regulation.
• C) pricing and incorporation.
• D) breaking and merging.

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Definitions:

Dividends

Payments made by a corporation to its shareholder members, typically from profits.

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs, representing surplus or loss.

Investment Return

The gain or loss on an investment over a specified period, expressed as a percentage of the investment's cost.

Interest Rate

The percentage charged by lenders to borrowers for the use of money, typically expressed at an annual rate.