Regulation is guaranteed to be more efficient than a monopoly.
A) True, the government is able to internalize the dead weight loss of the monopoly.
B) True, the consumers are better off if government provides the product rather than a private firm.
C) False, the government does not always have sufficient information to provide a more efficient market outcome.
D) False, the consumers are worse off under government regulation.

Question

Quizplus · Accepted Answer

While government regulation can mitigate some of the negative impacts of monopolies, it is not always more efficient. The government may lack the necessary information to make optimal decisions and may also be influenced by political considerations. Additionally, regulation can create compliance costs for firms and may reduce incentives for innovation and competition.

Regulation Is Guaranteed to Be More Efficient Than a Monopoly