Public ownership of natural monopolies ?
Correct answer: A. tends to be inefficient.
- A. tends to be inefficient.
- B. usually lowers the cost of production dramatically.
- C. creates synergies between the newly acquired firm and other government-owned companies.
- D. does none of the things described in these answers
Explanation
Public ownership can reduce some monopoly problems but often suffers from weak competitive pressure and bureaucratic inefficiency. It does not normally guarantee a dramatic reduction in production costs or special synergies.
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