The key issue in determining the efficiency of public versus private ownership of a monopoly is
a. the tendency for efficient management of publicly owned enterprises.
b. the inability of private monopolies to get rid of managers that are doing a bad job.
c. the propensity of private monopolies to generate excessive profits.
d. how ownership of the firm affects the cost of production.
d
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In the figure above, U.S. consumers' ________ from the tariff is ________
A) loss; $176 million B) gain; $64 million C) loss; $80 million D) gain; $128 million
All else constant, a large decrease in the number of people who want to own sport utility vehicles (SUVs) because of their poor fuel efficiency could be expected to cause:
A) an increase in the supply of SUVs. B) a decrease in the equilibrium price of gasoline. C) an increase in the equilibrium price of SUVs. D) an increase in the supply of gasoline.
If a good is produced by firms that incur all private and external costs, the price consumers pay
A) will be efficient since it includes all social costs. B) will be too low. C) will be too high because the consumers end up paying all of the costs instead of the firm. D) will be the correct price, but inefficient.
What is the key incentive that motivates a manufacturer to sell its products?
a. making profits on sales b. pleasing the consumer c. putting others out of business d. popularity of the product