An Industry Is a Natural Monopoly When (I) the Government Assists

question 47

Multiple Choice

An industry is a natural monopoly when (i) the government assists the firm in maintaining the monopoly.
(ii) a single firm owns a key resource.
(iii) a single firm can supply a good or service to an entire market at a smaller cost than could two or more firms.

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

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Definitions:

Bushel

A bushel is a unit of volume that is used for measuring agricultural commodities, with the exact weight varying by the type of commodity.

Lbs. Of Tea

This is not a key term in the context of economics or business; it refers to pounds of tea, a unit of measure for weight.

Comparative Advantage

The ability of a country, individual, company, or region to produce a good or service at a lower opportunity cost than its competitors, underlining the benefits of specialized production and trade.

Opportunity Cost

The relinquishment of possible rewards from other opportunities when one is selected.