Public policy toward monopolies Suppose that a government that is skeptical of efforts to regulate...

Public policy toward monopolies Suppose that a government that is skeptical of efforts to regulate prices charged by private companies is nevertheless concerned that an electric utility company is taking advantage of consumers with unfair pricing policies .

Which of the following policy options might most effectively enable the government to achieve its objectives in this situation?

Do nothing at all.
Turn the company into a public enterprise.
Regulate the firm's pricing behavior.
Use antitrust laws to increase competition.

Solutions

Expert Solution

Option B is correct.

When a company starts exploiting the consumer, the government must turn that company into a public enterprise as the organization wholly or partly owned by the state and controlled through a public authority. Through this conversion, the government will be able to achieve its objective and consumer is not to be exploited.

Rahul Sunny answered 2 years ago

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