Asked by Jalon Williams on Jul 21, 2024
Verified
One answer to the problem of natural monopoly is provision of the good by a government-owned and operated firm. Why is that option not used very often?
Government-Owned
Assets, businesses, or entities that are owned and operated by a government rather than by private individuals or companies.
- Elucidate the consequences of state interventions and regulatory measures on monopolies and natural monopolies.
Verified Answer
1G
18. Galuh Mafela Mutiara SujakJul 23, 2024
Final Answer :
We cannot necessarily expect more efficient production from a government firm. There is little personal incentive for managers of such a firm to cut costs or to manage in the interest of the general public rather than for their own professional and personal interests. Rational voter ignorance reduces the ability of voters to understand, monitor, and control the firm. There is no small group of shareholders to gain by taking control and increasing efficiency. Consumers often have good substitutes available for the government monopoly production, so their desires may not be served.
Learning Objectives
- Elucidate the consequences of state interventions and regulatory measures on monopolies and natural monopolies.
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