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15 May, 19:43

Which choice would be LEAST likely to be allowed to function as a natural monopoly in a society's economy?

A) Food distribution

B) Watershed management

C) Electricity generation

D) Hazardous waste disposal

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Answers (1)
  1. 15 May, 21:13
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    First of all, it is necessary to understand the concept of monopoly, which is the event of a single person or enterprise controlling the supply of a particular commodity. Following that logic, a natural monopoly can be understood as a given industry wherein high infrastructural costs and other barriers to entry relative to the size of the market give the largest - usually the first supplier - in the market a virtually overwhelming advantage over competitors.

    Therefore, it is possible to affirm that the lesta likely choice to be allowed to function as a natural monopoly in a society economy is food distribution, which can be performed by several different enterprises/individuals.

    On the other hand, watershed management, electricity generation and hazardous waste disposal, due to their high cost of capital, creating economies of scale that are large in relation to the size of the market.
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