When, if ever, would a monopoly in a particular industry be preferred to competition within that industry? Which of the following are examples of a natural monopoly? Select all tha... When, if ever, would a monopoly in a particular industry be preferred to competition within that industry? Which of the following are examples of a natural monopoly? Select all that apply.
Understand the Problem
The question is asking about the conditions under which a monopoly may be preferred over competition in an industry and examples of natural monopolies. It aims to explore concepts of economic monopolies and their implications.
Answer
a) Less costly for one firm. b) Local utility company.
The final answer is:
Part a: When it would be less costly for one firm rather than many firms to provide a good, as in a natural monopoly.
Part b: A local utility company.
Answer for screen readers
The final answer is:
Part a: When it would be less costly for one firm rather than many firms to provide a good, as in a natural monopoly.
Part b: A local utility company.
More Information
A natural monopoly occurs when a single firm can supply the entire market at a lower cost than two or more firms. Utilities often fall into this category due to high infrastructure costs.
Tips
A common mistake is assuming more competition is always better. For natural monopolies, competition can lead to inefficiencies.
Sources
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