3 marksMarket Failure
CAPE Economics Unit 1 · 2008 · Paper 2 · Question 4(b)(ii)
State why a natural monopoly uses resources inefficiently if unregulated.
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Practise this questionOther parts of this question
- 4(a)(i)Public good[12 marks]
- 4(a)(ii)Externalities[12 marks]
- 4(a)(iii)Asymmetric information (moral hazard and adverse selection)[15 marks]
- 4(b)(i)Explain what is meant by a 'natural monopoly'.[5 marks]
- 4(c)Identify ONE pricing rule that a regulator may apply, and state how it may be used to achieve efficiency.[3 marks]
More practice: the rest of this paper · more Market Failure questions · all CAPE Economics Unit 1 past papers