These are all policies directed at dealing with natural monopolies EXCEPT
A) allowing competition among firms for a monopoly right.
B) establishing public ownership of firms.
C) using external constraints regarding price and quantity on firm behavior.
D) providing government subsidies to new start-ups so they can achieve production efficiencies to compete.

Question

Quizplus · Accepted Answer

Natural monopolies typically arise in industries with high fixed costs and significant economies of scale, making it inefficient for multiple firms to operate. Options A, B, and C are common approaches to manage natural monopolies by either regulating them, taking them into public ownership, or allowing competition in a controlled manner. Option D, however, is not a direct approach to dealing with existing natural monopolies but rather aims to support new entrants in the market, which does not directly address the challenges posed by natural monopolies.

These Are All Policies Directed at Dealing with Natural Monopolies