If a Natural Monopoly Is Broken Up into Many Smaller

question 218

Multiple Choice

If a natural monopoly is broken up into many smaller firms then

• A) the price will decrease.
• B) the average total costs of production will increase.
• C) efficiency will increase.
• D) None of the above because it is illegal to break up a natural monopoly into smaller firms.

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Definitions:

Reward Power

Reward power is a form of social influence based on the ability to control the allocation of rewards valued by others, thereby modifying their behavior in a desired direction.

Knowledge Power

The idea that possessing knowledge grants an individual or group increased control, influence, or ability in decision-making processes.

Membership Groups

Groups to which individuals belong, where membership is often defined by shared characteristics, interests, or goals.

Criterion Groups

Specific groups used as reference points or standards when evaluating the characteristics or outcomes of other groups.