1. A natural monopoly means that a company is in charge of the production and selling of an specific item, good or service, because there is no other competitor able to provide it. This means the company in the monopoly will have to produce a high volume to satisfy the demand. This can sometimes allow for costs to be cheaper, for example with tools like automatization.
<u>Correct answer: A
</u>
2. If the price of complementary goods is increased the item that you're selling is not going to sell in the same way, so the supply in the market will grow.
<u>Correct answer: A
</u>
3. With a partner, she will have to share the profit, since that is usually the main motivation for someone else to team up with Sara, in order to invest in her business.
Correct answer: B
4. In theory, when competition is perfect, what is known as "the invisible hand" will keep prices and costs low (the invisible hand is a balance between supply, demand and competition)
Correct answer: C
