Which one of the following is the closest to being a natural monopoly?Group of answer choicesthe U. S. Postal Servicepublic educationyour local cable television companylong-distance telephone service
Question
Which one of the following is the closest to being a natural monopoly?Group of answer choicesthe U. S. Postal Servicepublic educationyour local cable television companylong-distance telephone service
Solution
Your local cable television company is the closest to being a natural monopoly. This is because the infrastructure required to deliver cable service (i.e., the physical cables and networks) is very expensive to build. Once a company has built this infrastructure, it is often not economically feasible for another company to build a competing network. This allows the first company to effectively monopolize the market in a given area.
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