Breaking a Monopoly Firm into Several Rival Firms Will Be

question 155

Multiple Choice

Breaking a monopoly firm into several rival firms will be unlikely to improve economic efficiency when economies of scale are important because

• A) several smaller firms will have higher per-unit costs than a single larger firm.
• B) a single firm will have higher per-unit costs than several smaller firms.
• C) it is harder to regulate many smaller firms than it is one large firm.
• D) consumers will find it harder to choose among the products of many alternative sellers.

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Definitions:

Uncertain Environments

Provide no information to predict expected results for decision-making alternatives.

Information Sufficient

Having enough data or facts to make informed decisions or reach conclusions.

Programmed Decision

A decision made in response to a recurring problem that involves a procedure or rule for its resolution.

Crisis Decision

Occurs when an unexpected problem can lead to disaster if not resolved quickly and appropriately.