A Natural Monopoly Is Most Likely to Occur in Which

question 42

Multiple Choice

A natural monopoly is most likely to occur in which of the following industries?

• A)the pharmaceutical industry because the development and approval of new drugs through the Food and Drug Administration can take more than 10 years
• B)the diamond mining and marketing industry because one firm can control a key resource
• C)the software industry because of the importance of network externalities
• D)an industry where fixed costs are very large relative to variable costs

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Definitions:

Systematic Thinkers

Individuals who approach problems or situations in a methodical and organized manner, often using a step-by-step process to analyze and solve issues.

Complex Problem

A problem characterized by a high degree of uncertainty, interconnected elements, and the potential for multiple solutions.

Problem Solving

The process of identifying a problem, developing possible solutions, and implementing an effective resolution.

Intuitive Thinking

A cognitive process that relies on instinctive feelings rather than analytical reasoning to make decisions or solve problems.