Which of the following is likely to be a natural monopoly?
A)the distribution of water through pipes to homes and businesses
B)the generation of electricity, that is before it is distributed through the power grid
C)the manufacture of large cars and trucks
D)professional services, such as legal advice and accounting services

Question

Quizplus · Accepted Answer

The distribution of water through pipes to homes and businesses is likely to be a natural monopoly because it is difficult for multiple companies to provide the necessary infrastructure and pipes to every home and business in a given area. This creates a barrier to entry for potential competitors and allows the existing provider to operate as a monopoly.

Which of the Following Is Likely to Be a Natural