Final answer:
The existence of monopolistic conditions in both the public and private sectors is true, with examples including utility companies and certain pharmaceutical drugs. Natural monopolies occur where a single firm can most efficiently meet market demand, and these are often regulated to protect consumers.
Thus the corret opction is:a
Step-by-step explanation:
The statement that monopolistic conditions exist both in the public sector and the private sector is true. Monopolies occur when there are barriers to entry in a market that has a single supplier, granting that supplier exclusive control over a commodity or service.
This control may enable the manipulation of prices. Natural monopolies, which are often regulated by governments, occur in industries where the cost structure and market demand are such that a single large firm is most efficient at supplying all of the output.
For example, utility companies like those providing water, electricity, and garbage collection services are often natural monopolies due to high fixed costs relative to variable costs, making it more cost-effective for one company to supply the entire market.
In such cases, competition can be costly and inefficient, so these monopolies are typically subject to government regulation to prevent customer exploitation through excessive pricing.
Additionally, in some sectors such as pharmaceuticals, monopoly-like conditions can occur when a new drug is produced by only one firm, and there are no close substitutes available.
This allows the pharmaceutical company to exercise considerable control over the pricing of the drug.