Using antitrust law to split up an unregulated natural monopoly into several competing firms
A)would reduce product price.
B)would increase product price.
C)might either increase product price or reduce product price.
D)would reduce average total cost.

Question

Quizplus · Accepted Answer

Splitting up a natural monopoly could either increase or decrease product prices depending on how the newly created competition affects market dynamics and costs. Natural monopolies often exist because they can serve the market more efficiently than multiple firms, so breaking them up could lead to higher costs and prices, or it could lead to innovation and lower prices.

Using Antitrust Law to Split Up an Unregulated Natural Monopoly