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One Government Policy for Dealing with a Natural Monopoly Is

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Essay

One government policy for dealing with a natural monopoly is to:
A.impose a price floor to eliminate the deadweight loss.
B.impose a price ceiling to reduce economic profit.
C.break it up into smaller firms.
D.impose fines on the monopolist.


Definitions:

Inflation

The escalation rate of average prices for goods and services, which deteriorates buying power.

Disinflation

A decrease in the rate of inflation, indicating a slowdown in the rate at which prices increase.

Deflation

A reduction in the overall price of products and services, frequently linked with a rise in the value of currency.

Recession Of 2001

A period of temporary economic decline during which trade and industrial activity were reduced, marked particularly by the bursting of the dot-com bubble.

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