The government often deregulates portions of industries that do not exhibit economies of scale to encourage competition and efficiency, while maintaining regulation on parts that do benefit from economies of scale.

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Government Has

Question 73

Multiple Choice

Government has:

A) deregulated the electricity industry because domestic producers are facing fierce international competition.
B) deregulated the entire electricity industry because the bureaucratic costs of maintaining the regulations became too high.
C) broken the electricity industry into subindustries and deregulated the portions that do not exhibit economies of scale.
D) broken the electricity industry into subindustries and deregulated the portions that exhibit economies of scale.

Correct Answer: