Scenario 15-2 Consider a Local, Privately-Owned Electrical Cooperative Named Minny County Megawatts

question 13

Multiple Choice

Scenario 15-2
Consider a local, privately-owned electrical cooperative named Minny County Megawatts (MCM, LLC) . MCM has just completed a natural-gas-burning electrical power plant in the Midwest. Currently, MCM can meet the electricity needs of all residents in the county. In fact, its capacity far exceeds the needs of the county. After just a few years of operation, the shareholders of MCM experienced incredible rates of return on their investment due to the profitability of the corporation.
-Refer to Scenario 15-2.Which of the following statements is most likely to be true?
(i) New entrants to the market know they will have a smaller market share than MCM currently has.
(ii) MCM would experience higher profits if it were government-run.
(iii) MCM is a natural monopoly.

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

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Definitions:

Moral Considerations

Ethical elements that influence decision-making, emphasizing the distinction between right and wrong actions in personal and professional contexts.

Ultimatum Game

A game in experimental economics and psychology, where two players decide on how to divide a sum of money; one player offers a split and the other can accept or reject it, where rejection means both get nothing.

Dictator Game

A behavioral experiment in economics where an individual, termed the "dictator," decides how to split an amount of money with another participant.

Fairness Considerations

Evaluations or judgments about the equity, justice, or fairness in situations, actions, or distribution of resources.