Question

2.4.2 Test (CST): Microeconomics

Question 17 of 20
Governments most often regulate essential services like water treatment by:
A. taking control over private corporations.
AT
O B. setting up natural monopolies.
O
C. creating barriers to entry in monopolistic competition.
O D. eliminating pure competition markets.
SUBMIT
18

Answer 1

Governments most often regulate essential services like water treatment by setting up natural monopolies.

Step-by-step explanation:

The government most often regulates essential services like water treatment by setting up natural monopolies. In a natural monopoly, a single company has exclusive control over the market due to high barriers to entry for other competitors. This is because providing essential services like water treatment requires significant infrastructure and resources, making it impractical for multiple companies to operate in the same market efficiently.

Learn more about government regulation of essential services