Government-Operated Firms with Monopoly Power

Multiple Choice

Government-operated firms with monopoly power

A) will necessarily meet the criteria of economic efficiency, as long as price equals average total cost.
B) will always be more efficient than private firms because they do not have to make a profit.
C) are likely to be inefficient since some of the monopoly power is likely to serve the interests of the governmental managers and employees.
D) are highly responsive to changes in the preferences of individual consumers since consumers are also voters.