A Natural Monopoly Exists in a Situation in Which

question 71

Multiple Choice

A natural monopoly exists in a situation in which

• A)competition decreases a good's price
• B)it is impossible to exclude someone from consumption of a good
• C)competition in the provision of a good or service would raise costs and reduce efficiency
• D)one supplier controls the entire supply of a good or service

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Definitions:

Utility Function

A representation of how consumer preferences over a set of goods and services are ordered, indicating the level of satisfaction derived from different bundles of goods.

Consumption

The action or process of using up goods and services, typically by households.

Utility Function

It is an economic model representing the preference level of consumers for different combinations of goods and services.

Income

A measure of the flow of funds from various sources, such as wages, investments, or business activities, that an individual or entity receives over a period of time.