Kim moved from one house in a neighborhood to another house in a nearby neighborhood. She called her trash collection company to inform them of her address change and was dismayed to learn that her trash collection bill will be $10 a month higher than it was at her previous residence even though it is the same company. She commented on this and was told by the lady from the company that was the price and she can deal with removing her own trash if she didn't like the price hike. Kim just had to pay the higher price because there was no other company allowed to service this neighborhood. What is the best reason why Kim was treated so poorly by this company?
A) the trash company was dependent on her repeat business
B) there are no other competitors providing this service
C) it is a regulated service
D) Kim preferred this company over any others
E) the company really doesn't need her business

Question

Quizplus · Accepted Answer

The trash company knows that there are no other competitors providing the same service in the neighborhood, so they have a monopoly and can charge higher prices without fear of losing customers. This lack of competition gives them the ability to treat customers poorly.

Kim Moved from One House in a Neighborhood to Another