If the Distribution of Water Is a Natural Monopoly, Then

question 479

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

---

Definitions:

Regression Analysis

A statistical technique for estimating the relationships among variables, often used to predict the value of a dependent variable based on the value of one or more independent variables.

Error Variable

An error variable represents the difference between observed and predicted values in a model, reflecting the amount of inaccuracy in predictions.

Standard Deviation

The square root of the variance, indicating how data points in a set differ from the mean value.

Linear Regression

A statistical method that models the relationship between a dependent variable and one or more independent variables using a linear equation.