Related to the Economics in Practice on page 279: The cable industry is best characterized as ________.
A) perfectly competitive
B) a natural monopoly
C) monopolistically competitive
D) having diseconomies of scale

Question

Quizplus · Accepted Answer

The cable industry is typically characterized as a natural monopoly because the fixed costs of installing and maintaining the necessary infrastructure are so high that it is prohibitively expensive for multiple firms to enter the market and compete. As a result, a single firm ends up dominating the market, enabling it to raise prices and earn above-normal profits.

Related to the Economics in Practice on Page 279: the Cable