If the Distribution of Water Is a Natural Monopoly, Which

question 78

Multiple Choice

If the distribution of water is a natural monopoly, which of the following is true?
(i) allowing for competition among different firms in the water distribution industry is efficient
(ii) a single firm can serve the market at a lower average total cost
(iii) multiple firms will each have to pay large fixed costs to develop their own network of pipes

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

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