The primary benefit from natural monopolies is that: multiple choice 1 a single firm will be more innovative. a single firm will have lower costs of production. there are no deadweight losses if the firm is a natural monopoly. a natural monopoly is unlikely to have market power. The primary problem created by natural monopolies is that: multiple choice 2 competition is likely to create more desirable economic outcomes. a price higher than marginal cost creates deadweight loss. it is not possible to regulate natural monopolies. monopolies are always inefficient.

Afinancial institution, the thriftem bank, is in the process of formulating its loan policy for the next quarter. a total of $12 million is allocated for that purpose. being a full-service facility, the bank is obligated to grant loans to different clientele. the following table provides the types of loans, the interest rate charged by the bank, and the possibility of bad debt as estimated from past experience.type of loaninterest rateprobability of bad debtpersonal.140.10car.130.07home.120.03farm.125.05commercial.100.02 bad debts are assumed unrecoverable and hence produce no interest revenue either. competition with other financial institutions in the area requires that the bank allocate at least 40% of the total funds to farm and commercial loans. to assist the housing industry in the region, home loans must equal at least 50% of the personal, car, and home loans. the bank also has a stated policy specifying that the overall ratio for bad debts on all loans may not exceed .04. formulate this problem as a linear program. define your variables clearly and write all the constraints explaining the significance of each.