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AP Microeconomics
Unit 4 – Imperfect Competition
Topic 4.2
A government decides to regulate a natural monopoly in order to promote competition and prevent the monopoly from becoming too powerful. Which of the following statements best explains the rationale behind this decision?
Natural monopolies charge high prices to maximize their profits.
Natural monopolies lack efficiency and innovation due to lack of competition.
Natural monopolies produce goods and services at the lowest possible cost.
Natural monopolies offer unique products or services in the market.
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AP Microeconomics - 4.2 Monopolies
Key terms
Monopoly
Natural Monopoly
Competition
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About Us
About Fiveable
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Terms of Use
Privacy Policy
CCPA Privacy Policy
Resources
Cram Mode
AP Score Calculators
Study Guides
Practice Quizzes
Glossary
Crisis Text Line
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© 2024 Fiveable Inc. All rights reserved.
AP® and SAT® are trademarks registered by the College Board, which is not affiliated with, and does not endorse this website.
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