One problem with government operation of monopolies is that
A)a benevolent government is likely to be interested in generating profits for political gain.
B)monopolies typically have rising average costs.
C)the government typically has little incentive to reduce costs.
D)a government-regulated outcome will increase the profitability of the monopoly.

Question

Quizplus · Accepted Answer

The government typically has less incentive to reduce costs because it does not face competition in the same way private companies do. This can lead to inefficiencies and higher operational costs compared to a scenario where a monopoly is operated in a competitive market environment.

One Problem with Government Operation of Monopolies Is That