Question

How does government regulate natural monopolies?

A. Ensuring and overseeing one supplier
B. Rationing consumption per supplier
C. Setting Price controls for multiple suppliers
D. Subsidizing suppliers during surplus

Answer 1

The correct answer is A, "ensuring and overseeing one supplier."

Step-by-step explanation:

I got 100% on the test. I hope this helps!

Answer 2

I believe the correct answer would be option A. The government regulate natural monopolies by ensuring and overseeing one supplier. A natural monopoly would happen when a largest manufacturer of a certain industry would have a very big gap as compared to other competitors. These industries are being regulated so as to minimize monopolization and to maintain the competitive equality between industries. Monopolies are mainly being governed by antitrust laws on a national level and on an international level. The ways that the government is regulating are establishing average cost pricing, price ceiling, Rate of return regulations and taxation laws.