Which of the Following,if True,is the Best Example of a Natural

question 13

Multiple Choice

Which of the following,if true,is the best example of a natural monopoly?

• A)The oil distribution industry where one distribution network serves the whole market
• B)The pharmaceutical industry where patents form a barrier to entry
• C)The beverages industry where the cost of capital is high and variable costs are low
• D)The hospitality industry where variable costs are higher than fixed costs

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Definitions:

Growth In Dividends

An increase in the amount of dividends paid out to shareholders over time, indicating a company's growing profitability and stability.

Market Index

A theoretical portfolio of investments representing a segment of the financial market, used as a benchmark to measure the performance of investments.

P/E Ratio

The Price to Earnings ratio, a valuation metric for stocks calculated by dividing the market price per share by its earnings per share.

Earnings Growth Rate

The annual rate of growth of a company's earnings per share, indicating the company's profitability trend over time.