Economics (AS & A Level) · May / June 2022 · Paper 31 · Question 10

In which circumstance would direct provision of a product by the government be least likely?

1. Awhen fixed costs are very high
2. Bwhen the demand for the product is very high but unit costs are low
3. Cwhen the industry faces large natural barriers to entry
4. Dwhen the minimum efficient scale of production is above the level of demand at current prices

As printed in the paper