One problem with government operation of monopolies
Type of Paper: Question-Answer
Academic Level: Undergrad. (yrs 3-4)
Paper Format: APA
One problem with government operation of monopolies is that a. a benevolent government is likely to be interested in generating profits for political gain. b. the government typically has little incentive to reduce costs. C. a government-regulated outcome will increase the profitability of the monopoly. d. monopolies typically have rising average costs. A law that restricts the ability of hotels/motels to advertise on billboards Outside of a resort community would likely lead to a. a request by consumers to increase the number of billboards. b. reduced efficiency of local lodging markets. c. no change in profits for all hotels/motels. d. increased price competition among hotels/motels in the community.
The government have little to no incentive to reduce the cost of the production.
It will reduce the efficiency as people will not get to know that there is a hotel or motel in that area.