A government-restrictions monopoly is most likely to result if a single firm:
A) is the only seller in a small town or community.
B) is investor-owned, but granted the exclusive right by the government to operate in a market.
C) experiences long-run increasing economies of scale over a wide range of output.
D) has gained control over a strategic input of an important production process.

Question

Quizplus · Accepted Answer

A government-restrictions monopoly is one in which the government grants a single firm the exclusive right to operate in a market. This is often done for industries that are seen as essential or natural monopolies, such as utilities or telecommunications. The firm may still be investor-owned, but it operates under government restrictions that limit competition. This can lead to higher prices and reduced consumer choice, but it is done in the interest of promoting efficiency and stability.

A Government-Restrictions Monopoly Is Most Likely to Result If a Single