Question

.Which of these is a natural monopoly?

Cell phone service

Computer repair

Package delivery service

Sewage treatment

Answer 1

@razor99

Answer 2

@Preetha

Answer 3

it's option A...

Answer 4

Its not option A. Its option D

Answer 5

i am sure... it;s A....

Answer 6

Okay instead of stating the answer why don't you walk me through why you think it's A.

Empirical evidence does not confirm your assertion, as we see far more cell phone providers per region than sewage treatment plants.

Both have huge up front fixed costs that might lead us to believe there are increasing returns to scale (the hallmark of a natural monopoly).

So based on the fact that empirically your answer is wrong, what makes you think that theoretically it is correct?