Unit Test — Unit test Answers

4 verified answers2 views

Why are utilities, such as electricity and water, examples of natural monopolies?

The cost of production restricts competition in the market.

There are limited natural resources to meet demand.

Consumers only trust known companies to provide these essentials.

There is no need for alternative options.

In which way do producers try to differentiate themselves in monopolistic competition?

price

advertising

product features

image

A monopoly is a market that has

few competing businesses.

many sellers of the same item.

many sellers of a variety of products.

a single supplier of a good or service.

Why is pure competition considered an unsustainable system?

Price differentiation is often too minimal to matter.

Few barriers exist to entry, meaning that the market inevitably floods.

Consumers cannot distinguish between products.

Producers cannot make a profit if they keep dropping their prices.

Did you find these answers helpful?

More from this Course