What Is a "Natural" Monopoly

question 153

Multiple Choice

What is a "natural" monopoly?

• A) One that occurs without any business firm trying to achieve it-that is, it just happens because the business does things right.
• B) A situation where one company can most efficiently supply all the product or service that is needed by consumers
• C) One where government finds it "natural" to grant monopoly powers to certain business firms.
• D) One that occurs when a business firm sets out to achieve a monopoly and no other firm tries to stop it.
• E) There is no such thing as a natural monopoly.

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Definitions:

Consolidation Purposes

Consolidation purposes involve reasons or objectives behind combining financial statements of multiple entities within a single corporate group, mainly for accurate financial reporting, analysis, and decision-making.

Consolidation Entry

An entry made in the financial records to combine the assets, liabilities, and other financial items of parent and subsidiary companies into one set of financial statements.

Loss on Sale

This refers to the situation where the sale price of an asset is less than its book value, resulting in a financial loss for the entity.

Equity Method

An accounting technique used when an investor holds significant influence over, but not majority ownership of, another company, incorporating the investor's share of the profits and losses.