Is Electricity Distribution a Contestable Market? Why or Why Not

question 82

Multiple Choice

Is electricity distribution a contestable market? Why or why not?

• A) No, because there are high fixed costs of erecting power lines to every house.
• B) No, because consumers feel loyal to their current power company.
• C) Yes, because there are no legal barriers to entry.
• D) Yes, because there are no fixed costs associated with distributing power.

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Definitions:

Simplify

To alter an expression into its simplest form by combining like terms, reducing fractions, or applying other algebraic rules.

Absolute Value

The length between a number and zero on a number line, disregarding its direction.

Domain

The domain of a function is the set of all possible input values (usually x-values) for which the function is defined.

Real Numbers

All the numbers on the number line, including rational and irrational numbers, but not imaginary numbers.