For a Long While, Electricity Producers Were Thought to Be

question 139

Multiple Choice

For a long while, electricity producers were thought to be a classic example of a natural monopoly. People held this view because

• A)the average cost of producing units of electricity by one producer in a specific region was lower than if the same quantity were produced by two or more producers in the same region.
• B)the average cost of producing units of electricity by one producer in a specific region was higher than if the same quantity were produced by two or more produced in the same region.
• C)the marginal cost of producing units of electricity by one producer in a specific region was higher than if the same quantity were produced by two or more producers in the same region.
• D)electricity is a special non-excludable good that could never be sold in a competitive market.

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Definitions:

Hold Title

The legal right of owning a piece of property, whether it's real estate or a vehicle, indicated by a document called a title.

Joint Stock Company

A hybrid form of business organization that combines characteristics of a corporation and a partnership. Usually, a joint stock company is regarded as a partnership for tax and other legal purposes.

Shareholders

Individuals or entities that own shares in a corporation, granting them various rights such as voting on corporate matters.

Agents

Individuals or entities authorized to act on behalf of others, making decisions or executing transactions in various contexts such as real estate, law, or finance.