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- Subject
- Applied Microeconomicseconomics-mcqs › applied-microeconomics
- Published
- 2 Jun 2019
- Last updated
- 28 May 2026
Explanation
Option B is correct because allowing consumers to buy electricity from gas companies and gas from electricity companies promotes competition by making markets contestable. This differs from deregulation, which refers to reducing government controls, and other options like natural monopoly or cross-subsidization, which do not describe this scenario.
More Applied Microeconomics MCQs
Practice related questions from the same subject.
- 1.According to the theory of the second best, when perfect competition is not present, what price should a privatized firm set?
- 2.What is the primary purpose of antitrust laws and market regulation in relation to competition?
- 3.How is the electricity sector structured in the UK in terms of market characteristics?
- 4.Why do sales representatives often promote the sale of extended warranties?
- 5.What type of merger involves companies that operate in completely different industries?
- 6.Antitrust laws are founded on which fundamental principle?
- 7.How would you describe the external advantages and disadvantages associated with car usage?
- 8.During the decade from 1990 to 1999, in which country did the number of cars owned per thousand people decrease?
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