-Most natural monopolies are regulated at some level by a government because:
A)an unregulated natural monopolist would cause the problem of capital outflow.
B)an unregulated natural monopolist would produce only for government bureaucrats.
C)an unregulated natural monopolist would charge an inefficiently low price in the market.
D)an unregulated natural monopolist would charge an inefficiently high price in the market.
E)an unregulated natural monopolist would incur losses.

Question

-Most natural monopolies are regulated at some level by a government because:
A)an unregulated natural monopolist would cause the problem of capital outflow. 
B)an unregulated natural monopolist would produce only for government bureaucrats. 
C)an unregulated natural monopolist would charge an inefficiently low price in the market. 
D)an unregulated natural monopolist would charge an inefficiently high price in the market. 
E)an unregulated natural monopolist would incur losses.

Quizplus · Accepted Answer

An unregulated natural monopolist might charge an inefficiently high price in the market to maximize profits, as they face little to no competition. This can lead to reduced access for consumers and inefficiencies in the market, prompting government regulation to ensure fair pricing and access.

-Most Natural Monopolies Are Regulated at Some Level by a Government