In the Case of a Natural Monopoly,which Government Response Is

question 116

Multiple Choice

In the case of a natural monopoly,which government response is LEAST practical?

• A) leave the monopolist firm free to maximize its profits
• B) buy the monopolist firm and operate it as a government-owned entity
• C) force the monopolist to break up into firms that compete with one another
• D) subsidize the monopoly,so it can operate at the socially optimal production level
• E) regulate the monopolist firm's price,to equal average total cost

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Definitions:

Free Markets

Economic systems where transactions are conducted without significant government intervention, allowing for the free exchange of goods and services based on supply and demand.

Education Levels

The attainment or degree of educational qualifications measured across a population, reflecting various stages like primary, secondary, and tertiary education.

Literacy Rates

Literacy Rates measure the percentage of the population over a certain age that can read and write, often used as an indicator of educational achievement.

Convergence

A theory predicting that the standard of living in economies around the world will grow more similar over time, with poorer countries eventually catching up with richer ones.