Respuesta :
People though that electricity producers were an example of a natural monopoly because 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.
What is a natural monopoly?
A monopoly is when there is only one firm operating in an industry. This is due to the high barriers to entry of other firms. A monopoly earns economic profit in the long run.
A natural monopoly is a type of monopoly characterised by high infrastructural costs when compared to the size of the industry. This high infrastructural costs creates a barrier to entry for other firms and gives the largest supplier an advantage when compared with other suppliers in the industry.
Features of natural monopolies include:
- A high fixed cost and low marginal cost of production
- Natural monopolies occur through the free market and not by government regulations.
Here are the options:
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. electricity is a special non-excludable good that could never be sold in a competitive market.
D. 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.
To learn more about monopolies, please check: https://brainly.com/question/10441375
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