Which of the following statements is not correct?
A)The government may use antitrust laws to break up an existing company to improve competition.
B)The government may break up a natural monopoly to lower the price charged to customers.
C)Economists usually prefer private ownership to public ownership of natural monopolies.
D)Sometimes the best strategy is for the government to do nothing about monopoly inefficiency because the "fix" may be worse than the problem.

Question

Quizplus · Accepted Answer

Natural monopolies exist where high infrastructure costs and other barriers to entry significantly limit competition. Economists often argue that breaking up a natural monopoly can lead to inefficiencies and higher costs due to the loss of economies of scale. Therefore, the government might regulate a natural monopoly rather than break it up to ensure fair prices and service levels, making statement B incorrect in the context of typical economic policy towards natural monopolies.

Which of the Following Statements Is Not Correct