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What Would Be the Impact If the Government Forced the Breakup

Question 2

Multiple Choice

What would be the impact if the government forced the breakup of a natural monopoly to promote greater competition in an industry?


A) Smaller firms would have a cost advantage over larger firms.
B) The price paid by consumers would be unchanged.
C) The average cost of producing the good would increase.
D) The average cost of producing the good would decrease.

Correct Answer:

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