One problem with government ownership of natural monopolies is that:
A. the government has no reason to set price equal to marginal cost.
B. it forces the government to either raise taxes or lower spending.
C. the government could violate its own antitrust laws.
D. government-owned firms have weaker incentives to cut costs than do privately-owned firms.
Answer: D
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The equilibrium level of employment, achieved after the complete adjustment of wages and prices, is known as the
A) zero-unemployment level of employment. B) natural state. C) invisible handshake. D) full-employment level of employment.
If the price falls below minimum SRAVC, the quantity supplied by the firm will be
a. the quantity at minimum MC. b. zero. c. the quantity at the point where MC intersects AC. d. the quantity at minimum AC.
From a consumer's viewpoint, which of the following policies would be least desirable?
A. Free trade. B. Quotas on imported goods. C. No trade. D. Tariffs on imported goods.
Which of the following would not be considered physical capital?
A. A spotlight B. An optical lens C. A trained physicist D. A clipboard