A natural monopoly can h. supply the entire market at a lower cost than many com
ID: 1111693 • Letter: A
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A natural monopoly can h. supply the entire market at a lower cost than many competing firms. d.use natural resources without being subjected to government regulations. ply the entire market at a higher cost than many competing firms always charge any price it wants since it faces no competition. 6If electrical service can be more efficiently provided to a market by a single supplier than by many competing suppliers, the market is considered to be a(n): a. natural monopoly. b. unregulated monopoly c. rent-seeking monopoly. d. efficient monopoly In order to price discriminate, a monopoly firm must be able to: a. separate customers based on different elasticities of demand. b. charge each customer the same price. c. incur a different cost for producing each unit of output. 1. d. all of the above. 265 Chapter 12 AssignmentsExplanation / Answer
(5)
A firm has a natural monopoly when a single firm can supply goods or services at a lower cost compared to two more few more firms.
Hence it can be said that a natural monopoly can supply entire market at a lower cost than many competing firms.
hence option b is the correct answer.
(6)
A firm has a natural monopoly when a single firm can supply goods or services at a lower cost compared to two more few more firms.
Since the electrical services are able to provide services to entire market at a lower cost than many competing firms, therefore it is considered a natural monopoly.
Hence option a is the correct answer,
(7)
A monopolist can price discriminate among the consumers only when he has the ability to identify the different consumers having a different price elasticity of demand and a monopolist should also ensure that consumers could not resale the goods.
Hence for a monopolist to price discriminate it is necessary that he must be able to separate the customers based on the different elasticity of demand.
hence option a is the correct answer.
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