A public utility would be an example of
A)a natural monopoly.
B)an unnatural monopoly.
C)an unregulated private monopoly.
D)a competitive monopoly.

Question

Quizplus · Accepted Answer

A public utility would be an example of a natural monopoly. This is because the high fixed costs involved in providing utility services such as electricity or water supply make it economically efficient for only one company to operate in a given area. Therefore, competition would be a waste of resources and result in higher prices for consumers. To prevent this, utilities are usually regulated by the government to ensure that prices remain reasonable for consumers while still allowing the company to earn a fair return on investment.

A Public Utility Would Be an Example of