6
AssignmentMultiple Select

Market Structures and Competition

Question 6 • 2102320-Economics HONORS - Edgenuity Teacher

How could a government regulate a natural monopoly? Check all that apply.It could buy out the company and operate it instead.It could limit how much the company charges customers.It could force the company to offer a different good or service. It could insist a company get approval before making certain decisions.It could set up new companies to introduce competition into the market.It could split the company into smaller firms that serve different customers.

Answer
A
It could buy out the company and operate it instead.
B
It could limit how much the company charges customers.
C
It could force the company to offer a different good or service.
D
It could insist a company get approval before making certain decisions.
E
It could set up new companies to introduce competition into the market.
F
It could split the company into smaller firms that serve different customers.

Explanation

A government can regulate a natural monopoly by taking ownership and operating it, limiting the prices it charges, or requiring approval for certain decisions. These approaches let the government control the company’s conduct without relying on competing firms. Forcing a different product or splitting the company does not directly regulate its prices or decisions, and creating competitors may be impractical because a natural monopoly’s cost structure favors one provider.

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