Which of the following statements is false if the government nationalizes an existing monopoly firm?
A)The government usually buys out the owners of the firm and operates it as a crown corporation.
B)A nationalized monopoly may or may not be operated to make a profit.
C)There is no guarantee that a nationalized monopoly will be more efficient because it is owned by the government.
D)A nationalized monopoly can be expected to always charge the socially optimum price.

Question

Quizplus · Accepted Answer

A nationalized monopoly does not always charge a socially optimum price. In fact, it may still have incentives to charge higher prices or operate inefficiently, especially if it lacks competition or if its managers are not held accountable. Therefore, statement D is false.

Which of the Following Statements Is False If the Government