Question

An example of government ownership of a monopoly is (LO6) a) the Tennessee Valley Authority b) the New York State Public Service Commission c) AT\&T d) General Motors

Short answer

The correct answer is a) the Tennessee Valley Authority, as it is a government-owned monopoly that dominates the production and distribution of electricity and related services in its region.

Step-by-step solution

Understand government-owned monopoly

First, let's understand what a government-owned monopoly is. A government-owned monopoly is a market structure in which a single entity, controlled by the government, dominates production and distribution of goods or services in the industry.

Examine the options

Now let's examine each option and determine if it is a government-owned monopoly: a) The Tennessee Valley Authority (TVA) The TVA is a federally-owned corporation in the United States created in 1933 to provide electricity generation, flood control, navigation, and economic development in the Tennessee Valley region. It is government-owned and operates in a market with limited competition. b) The New York State Public Service Commission (NYPSC) The NYPSC regulates utilities in the state of New York, such as electric, gas, and water companies, but it doesn't directly provide these services. Instead, it ensures fair pricing and operation for consumers. So, it is not a government-owned monopoly providing goods or services. c) AT&T AT&T is a private telecommunications company, not owned by the government. It operates in a competitive market with multiple other telecommunications providers. Thus, it is not a government-owned monopoly. d) General Motors (GM) General Motors is a private automobile manufacturer, not owned by the government, and competes with other automobile manufacturers in the automotive industry. Therefore, it is not a government-owned monopoly.

Identify the government-owned monopoly

Based on our analysis, we can see that the Tennessee Valley Authority (TVA) is the only option that represents a government-owned monopoly. It is controlled by the government and dominates the production and distribution of electricity and related services in its region. So, the correct answer is: a) the Tennessee Valley Authority