Industries such as local telephone service, natural gas, and?

a. highly competitive because of the large numbers of consumers.
b. price takers in a competitive market.
c. natural monopolies.
d. forced to compete with rivals offering many substitute goods and services.

2 Responses to “Industries such as local telephone service, natural gas, and?”

  1. easymac Says:

    Pretty sure this is C.

    The two industries you mentioned are very hard markets to get into, privately, because they require a lot of infrastructure to be built (telephone poles/wires, gas veins and pipes), so usually there is only one business supplying (often with a government subsidy and price ceiling) that infrastructure and thus that service.

  2. drbsen Says:

    the answer is C. Natural Monopolies. In these industries because of the nature of operation (fixed to consumers in a given locality or fixed location of mining from reserves at a given site) it is uneconomic for competetors to fight. So in these industries monopolies (some time duopolies) are allowed as otherwise no entrepreneur will be interested in doing this business. But such natral monopoly businesses are highly regulated by independent regulatory commissions to ensure reasonable price for both the consumers and producers/ suppliers and reasonal customer service standards. The problem arises when natural monopolies are in the public sector. Being in the Govt., they seldom care for the consumers nor for adequate returns on capital. Regulatory agency being Govt entities, they hardly can do anything.““““““““““““““““`