-Most Natural Monopolies Are Regulated at Some Level by a Government

question 48

Multiple Choice

-Most natural monopolies are regulated at some level by a government because:

• A)an unregulated natural monopolist would cause the problem of capital outflow.
• B)an unregulated natural monopolist would produce only for government bureaucrats.
• C)an unregulated natural monopolist would charge an inefficiently low price in the market.
• D)an unregulated natural monopolist would charge an inefficiently high price in the market.
• E)an unregulated natural monopolist would incur losses.

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Definitions:

Porter's Five Forces Model

A framework for analyzing a business's competitive environment, focusing on five key forces that influence its ability to serve customers and turn a profit.

Substitute Products

Products that serve as alternatives to one another in the market, satisfying similar needs or wants of consumers.