Without Competition, There Is a Tendency for a Government-Run or Regulated

question 45

Multiple Choice

Without competition, there is a tendency for a government-run or regulated monopoly to:

• A) keep prices constant.
• B) become inefficient by passing higher costs on to consumers.
• C) find ways to decrease costs so as to increase profits.
• D) become a natural monopoly.

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Definitions:

Total Dollar Amount

The complete sum of all monetary figures in question, without considering the breakdown of components that constitute this total.

Activity Changes

Refers to alterations in the volume or pace of operations or transactions within a business over a period.

Variable Costs

Costs that vary directly with the level of production or volume of output, such as raw materials and labor directly involved in manufacturing.

Activity Levels

A measure used in cost accounting to evaluate the relation between the cost of a particular activity and the level of activity executed.