Question

If government officials break up a natural monopoly into four smaller firms, thena. the average cost of production will increase.b. competition will force firms to produce surplus output, which drives up price.c. each firm will be unable to maximize profits due to increased competition.d. consumers will benefit from lower average total costs.

Answer 1

The answer is letter A.

Step-by-step explanation:

The average cost of production will increase. Because a monopoly firm is firm that operates in a monopoly market. Monopoly market is a market structure that has only one firm in the market and many buyers.