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

---

Definitions:

Human Capital

Human Capital represents the skills, knowledge, and experience possessed by individuals, considered in terms of their value to an organization.

Skills Gap

A situation in which the supply of a particular form of human capital available to the firm is inadequate to address the demand.

North America

A continent entirely within the Northern Hemisphere and almost all within the Western Hemisphere; it is bordered by the Arctic Ocean to the north, the Atlantic Ocean to the east, the Pacific Ocean to the south and west, and South America and the Caribbean Sea to the southeast.

Human Capital Flow

Encompasses the movement of employees' skills, knowledge, and abilities across different roles, organizations, or geographies.