Question

Consider the case of long distance telephone service. In country X there are 20 providers of long distance telephone service in a highly competitive market environment. On the other hand, in country Y long distance telephone service is largely regulated by the government with the firm Horizon as the sole provider of this service. Under these circumstances it is expected that

A. Country X will have higher growth potential than country Y.
B. Country X will have lower growth potential than country Y.
C. Countries X and Y will have similar growth potential.

Answer 1

The answer is A. Country X will have higher growth potential than country Y.

Step-by-step explanation:

Due to the increased competition in country X the introduction of new technologies by the competing service providers will lead to a higher grwoth potential.