Chapter 10R, Problem 3CTQ

a)

To determine

Whether wind turbines are power sources that come from natural monopolies and whether they set up centralized, decentralized, or soft-path sources.

Explanation of Solution

Wind turbines are power sources that come from natural resource winds which show natural monopoly as different utility industries use this power source to generate electricity and its average cost starts to fall with the increase in its size. These power sources could be set up either as centralized power sources or as decentralized soft-path sources because the decisions are partially made by the organization by including the intervention of the government and it does not impact the environment.

Economics Concept Introduction

Introduction:

A natural monopoly refers to an industry that incurred high infrastructural costs and there are barriers to entry into the market.

b)

To determine

Whether hydroelectric power generation along a river is power sources that come from natural monopolies and whether they set up centralized, decentralized, or soft-path sources.

Explanation of Solution

Hydroelectric power generation along a river is a power source that comes from natural resource

Hydroelectric power generation along a river could be set up either as centralized power sources or as decentralized soft-path sources because there is the intervention of the government and decisions are partially made by the organization and it does not impact the environment.

Economics Concept Introduction

Introduction:

A natural monopoly refers to an industry that incurred high infrastructural costs and there are barriers to entry into the market.

c)

To determine

Whether coal is power source that come from natural monopolies and whether they set up centralized, decentralized, or soft-path sources.

Explanation of Solution

As coal is the largest power source that is used to produce electricity, therefore, it is a power source that comes from natural resources but it is a government monopoly. This power source considers a hard-path source because it uses a hard energy path in huge through centralized coal fire to generate electricity.

Economics Concept Introduction

Introduction:

A natural monopoly refers to an industry that incurred high infrastructural costs and there are barriers to entry into the market.

d)

To determine

Whether oil is the power source that comes from natural monopolies and whether they set up centralized, decentralized, or soft-path sources.

Explanation of Solution

Oil comes from natural resources and it is considered an oligopoly market. It is an industrial monopoly because here, profits attract investments in oil-producing capital that help in the growth of the economy. And, it is a hard-path centralized energy source because it creates environmental problems when used.

Economics Concept Introduction

Introduction:

A natural monopoly refers to an industry that incurred high infrastructural costs and there are barriers to entry into the market.

e)

To determine

Whether solar power sources that come from natural monopolies and whether they set up centralized, decentralized, or soft-path sources.

Explanation of Solution

Solar is a power source that comes from natural resources and it is a natural monopoly as any person can start generating electricity through this source, which means the market is free.

There would be no intervention of the government in this power source and it is a soft path centralized approach for an individual or the organization.

Economics Concept Introduction

Introduction:

A natural monopoly refers to an industry that incurred high infrastructural costs and there are barriers to entry into the market.

f)

To determine

Whether nuclear power sources that come from natural monopolies and whether they set up centralized, decentralized, or soft-path sources.

Explanation of Solution

As nuclear is used to produce electricity through nuclear decay or fission, which means it is a power source that comes from natural resources but it is a natural government monopoly. This power source considers a hard-path source because it uses a hard energy path in huge through centralized nuclear power plants to generate electricity.

Economics Concept Introduction

Introduction:

A natural monopoly refers to an industry that incurred high infrastructural costs and there are barriers to entry into the market.