Question

Which of the following goods are likely to be sold a natural monopolist?

A. jeans

B. breakfast cereal

C. electricity distribution in a city.

D. wrist watches

Answer 1

it can be mentioned that jeans breakfast cereal and wrist watches can be considered as monopolistic competition because there are many number of producers of these where each of them sell a differentiated product as a result of which you can understand that there are no barriers to entry which is why they can be considered as monopolistic competition and not a Monopoly and that is the reason why it can be mentioned that

(A,B,D) are wrong

an electricity distribution company in the city might be a natural monopolist because it might have the ownership of the resources such as coal and this natural ownership gives then the power of natural monopolist on the whole and that is the reason why

(C) is the answer to this question