Natural monopolies that require large expenditures on fixed capital equipment are
A) well suited to exclusive contracting.
B) always owned by a provincial or municipal government.
C) never subjected to cost-plus regulation.
D) very profitable.
E) poorly suited to exclusive contracting.

Question

Quizplus · Accepted Answer

Natural monopolies that require large expenditures on fixed capital equipment are not well suited to exclusive contracting because it would limit competition and lead to higher prices for consumers. Therefore, the best choice is E - poorly suited to exclusive contracting.

Natural Monopolies That Require Large Expenditures on Fixed Capital Equipment