ECONOMICS
COMPETITION AND MARKET STRUCTURES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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a city water system
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an intergovernmental revenue payment
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a balanced budget amendment
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all three of these
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Detailed explanation-1: -The case of tap water can be an example of a natural monopoly. It makes sense to have only one company providing a network of water pipes and sewers because the setting up of a national network of pipes and sewage systems entails very high capital costs.
Detailed explanation-2: -For example, the utility industry is a natural monopoly. The utility monopolies provide water, sewer services, electricity transmission, and energy distribution such as retail natural gas transmission to cities and towns across the country.
Detailed explanation-3: -Yes, the transit system is a natural monopoly because average costs fall over the range that meets market demand.
Detailed explanation-4: -Natural gas, electricity companies, and other utility companies are examples of natural monopolies. They exist as monopolies because the cost to enter the industry is high and new entrants are unable to provide the same services at lower prices and in quantities comparable to the existing firm.
Detailed explanation-5: -Monopoly Example #1 – Railways. Monopoly Example #2 – Luxottica. Monopoly Example #3-Microsoft. Monopoly Example #4 – AB InBev. Monopoly Example #5 – Google. Monopoly Example #6 – Patents. Monopoly Example #7 – AT&T. Monopoly Example #8 – Facebook.