How Does Privatization Help Stimulate Gains in Economic Efficiency

Multiple Choice

How does privatization help stimulate gains in economic efficiency?

A) It allows newly privatized firms to gain monopoly position in a particular industry.
B) It provides incentives to new private owners to search for increases in productivity and to enter new markets.
C) It encourages state control over price and production output.
D) It raises barriers to direct investment by foreign enterprises.
E) It results in reservation of heavy industry for state ownership and the increase of import tariffs.