In Canada,in the majority of cases where there is a natural monopoly,how does the government usually deal with the problem
A)by splitting the natural monopoly into smaller companies
B)through regulation
C)by turning the natural monopoly into a public enterprise
D)by always setting price equal to marginal cost

Question

Quizplus · Accepted Answer

In Canada, the government usually deals with natural monopolies through regulation. This involves setting rules and conditions for the natural monopoly's operations in order to prevent it from abusing its market power and charging excessively high prices. The regulations may include price controls, quality standards, and restrictions on entry by potential competitors. Splitting the natural monopoly into smaller companies or turning it into a public enterprise are less common options. Setting price equal to marginal cost is not a practical solution as it would not allow the natural monopoly to cover its fixed costs and earn a reasonable profit.

In Canada,in the Majority of Cases Where There Is a Natural