The two alternative ways of promoting better outcomes when a natural monopoly exists are
A) subsidy and taxation.
B) public ownership and regulation.
C) pricing and incorporation.
D) breaking and merging.

Question

Quizplus · Accepted Answer

The two alternative ways of promoting better outcomes when a natural monopoly exists are public ownership and regulation. Natural monopolies are those industries where a single firm can produce a good or service at a lower cost than any potential competitor, making it difficult for other firms to enter the market.

Public ownership involves the government taking ownership of the natural monopoly, thereby ensuring that it is operated in the best interests of the public. This approach can help to reduce costs and improve quality and service provision.

Regulation, on the other hand, involves setting rules for the operation of the natural monopoly to ensure that it operates in a way that benefits the public. This can include price controls, quality standards, and service obligations.

Together, public ownership and regulation can help promote better outcomes for consumers when a natural monopoly exists, ensuring that the market operates in a way that benefits everyone.

The Two Alternative Ways of Promoting Better Outcomes When a Natural