For a long while, electricity producers were thought to be a classic example of a natural monopoly. People held this view because
a. the average cost of producing units of electricity by one producer in a specific region was lower than if the same quantity were produced by two or more producers in the same region.
b. the average cost of producing units of electricity by one producer in a specific region was higher than if the same quantity were produced by two or more produced in the same region.
c. the marginal cost of producing units of electricity by one producer in a specific region was higher than if the same quantity were produced by two or more producers in the same region.
d. electricity is a special non-excludable good that could never be sold in a competitive market.
a
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Which is an example of a negative externality?
A) A tornado B) A hurricane C) A flood D) All of the above. E) None of the above.
Compared to a single-price monopolist, a price-discriminating monopolist
A) produces more output. B) produces the same amount of output but charges a higher price. C) generates a larger deadweight loss. D) produces less output but charges a lower price.