A government-owned monopoly is more likely to: 1. provide a greater quantity of output than a...

A government-owned monopoly is more likely to:

1. provide a greater quantity of output than a private one.

2. provide output at a lower price than a private one.

3. serve public interest than maximize profit.

4. All of these statements are true.

Solutions

Expert Solution

Answer- The correct option is 4 , i.e. All of these statements are true. A monopoly is a market structure where there is a sole seller of certain goods or services and that seller is the price maker and tries to maximise it’s profits. A government owned monopoly is where such minopoly is owned hy the government. One such example of government monopoly is LAW.

In case of government monopoly their main aim is to provide people with goods and services at a cost which will be less than the cost if such goods or services were provided by the private sector. Apart from such price setting the government will also undertake to sell more number of units than a private sector would do. If the government feels that private sector would do better then it will bring privatisation in that particular sector.

Apart from the above discussed matter the government will also try to focus on serving the customers better than with the aim to maximise profits.

Rahul Sunny answered 1 year ago

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