Question

Choose which of the four proposals you would consider to be the most efficient and best choice for the people of Detroit who is experiencing a aggressive recession with unemployment rates topping 15% The first proposal Ask the government for a bailout of $30 million in order to allow Spirit Electric to continue operation. Spirit Electric is a natural monopoly. Second proposal Allow two outside companies to join the industry and supply electric to the people of Detroit Third Increase Electric rates in the short term for all users and once the economy rebounds electric rates will return to normal. Fourth proposal Create private virtual accounts managed by Spirit Electric for all households. Account s would allow households who fall behind in payments to credit their accounts with a 2% fee after 6 months of not making payments. choose one?

Answer 1

According to me, I would go with the first proposal to ask the government for a bailout of $30 million.

The reason why I am proposing for the bailout money because the economy is facing a recession with a very high rate of unemployment.During, the great depression also the Federal Reserve bailed out the companies which they considered "too big to fail".

As in this case, Spirit Electric is a monopoly and employs a large chunk of the population and if it is not allowed to continue its operation then we might see an increase in the unemployment rate.