Most government franchises are granted to natural monopolies.

Question

Quizplus · Accepted Answer

Natural monopolies are industries where one firm can produce and distribute the entire output more efficiently than any potential competitor. This includes industries such as utilities (water, electricity, gas), transportation (railways, airports), and telecommunications. Due to the high start-up costs and infrastructure requirements, it is generally not economically viable for more than one firm to operate in these industries, making them ideal candidates for government franchises.

Most Government Franchises Are Granted to Natural Monopolies