In the Republic of Lantharia,the state-owned telephone company enjoys a monopoly.The government of Lantharia Republic wants to maximize the operating efficiency of this company by privatizing it.Which of the following is most likely to help the government succeed in this endeavor?
A)imposing high corporate taxes on the company immediately after its privatization
B)increasing barriers to foreign direct investment
C)intervening in the company's operations by exercising price controls
D)splitting the company into independent units to compete with each other
E)prohibiting foreign companies from entering into the field of telecommunication in the Republic of Lantharia

Question

Quizplus · Accepted Answer

Splitting the company into independent units to compete with each other is most likely to help the government succeed in privatizing the state-owned telephone company as it will create competition and increase efficiency. All the other options are likely to hinder the privatization process, as they either impose taxes or barriers or limit competition, which can discourage investors and result in lower efficiency.

In the Republic of Lantharia,the State-Owned Telephone Company Enjoys a Monopoly.The