ECONOMICS
MARKET FAILURES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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the water system that serves the greater Boston metropolitan area
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millionaire John D. Rockefeller’s Standard Oil Company
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he only sandstone quarry in Menomonie, Wisconsin
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author J.K. Rowling’s copyright for her Harry Potter novels
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Detailed explanation-1: -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-2: -A monopoly is a firm who is the sole seller of its product, and where there are no close substitutes. An unregulated monopoly has market power and can influence prices. Examples: Microsoft and Windows, DeBeers and diamonds, your local natural gas company.
Detailed explanation-3: -Natural Monopoly Examples Telecommunications (Telecoms) Utilities and Energy Sector (Electric Power Supply and Grids) Oil and Gas (O&G) Railway and Subway Transportation.
Detailed explanation-4: -An industry is said to be a natural monopoly if one firm can produce the desired market demand at a lower cost than two (or more) firms can.