Question

Give an example of a public franchise and an example of a public enterprise. An example of a public franchise is

A.the government directly providing sewage services, and an example of a public enterprise is a natural monopoly providing water.

B. a perfectly competitive apple farmer, and an example of a public enterprise is a duopoly that provides railroad transportation

C. a firm that is the​ sole, government-designated provider of natural gas, and an example of a public enterprise is a firm that sells a differentiated product such as clothing

D. a firm that is the​ sole, government-designated provider of electricity​, and an example of a public enterprise is the government directly providing water.

Answer 1

A public franchise example is a sole government-designated electricity provider, while a public enterprise is typically government-run services like water provision. Public utilities, as natural monopolies, exist where competition is impractical due to infrastructure costs.

Step-by-step explanation:

An example of a public franchise is a firm that is the sole, government-designated provider of electricity, and an example of a public enterprise is the government directly providing water services. Public utilities that provide water and electrical services are considered natural monopolies because it would be inefficient and excessively costly to have multiple competing providers due to the infrastructure required, such as pipelines and electrical wires.

A natural monopoly occurs when a market runs more efficiently with one large provider rather than multiple competitors. Governments often permit and regulate these natural monopolies to ensure services are provided without wasteful duplication of infrastructure, and they may impose price controls as part of this arrangement.