In the UK, electricity industry parts are a ____ and other parts are ___ ?
Correct answer: B. natural monopoly; potentially competitive
- A. nationalized; privatized
- B. natural monopoly; potentially competitive
- C. cartel; a sellers' market
- D. monopolistic competition duopoly
Explanation
Electricity transmission and distribution networks have natural-monopoly characteristics because one network can serve the market more cheaply than duplicated networks. Generation and supply, however, can be opened to competition.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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