Breaking up a company that has a natural monopoly would
A) result in higher production costs.
B) result in lower production costs.
C) benefit society.
D) result in lower prices for consumers.
E) increase government tax revenue.

Question

Quizplus · Accepted Answer

Breaking up a company that has a natural monopoly would result in higher production costs. This is because natural monopolies exist due to economies of scale, which allow a company to produce a good or service at lower costs than any potential competitors. If the company is broken up, the smaller firms may not be able to achieve the same economies of scale, leading to higher production costs.

Breaking Up a Company That Has a Natural Monopoly Would