Question

QUESTION 13 You read the Electricity City Utility Company has problems. Its headquarters had an expansive retaining wall collapse during a flood last week. This led to toxic coal ash flows that buried homes and even caused a few fatalities. An editorial claims that the company will not be held accountable to the same standards as the asbestos companies that paid severe fines and even went out of business due to their lack of attention to environmental clean-up. You agree with the writer because you recently studied about the various competitive markets and utility companies clearly fall under monopolistic competition O True O False QUESTION 14 A monopoly occurs when there is a single seller for a product or service. O True O False QUESTION 15 A free-market economic system is one in which the market of buyers and sellers decides what is produced, how much is produced and how it is distributed O True O False QUESTION 16

Answer 1

(Question 13) False.

Utility companies are either monopoly (if only one firm caters a locality) or oligopoly (if there are a few large utility firms operating in a locality). They do not operate in monopolistic competitive market.

(Question 14) True

Since monopolist is the single seller, industry and firm are one and the same in monopoly market.

(Question 15) True

A free market equilibrium determined by equality of demand and supply determines price and output of the good.