One problem with government ownership of natural monopolies is that:
A)the government has no reason to set price equal to marginal cost.
B)the government could violate its own antitrust laws.
C)government-owned firms have weaker incentives to cut costs than do privately-owned firms.
D)it forces the government to either raise taxes or lower spending.

Question

Quizplus · Accepted Answer

Unlike a private monopoly, a government-owned monopoly is not motivated to cut its cost in order to increase its profit.

One Problem with Government Ownership of Natural Monopolies Is That