Question

Suppose that a government that is skeptical of efforts to regulate prices charged by private companies is nevertheless concerned that an electric utility company is taking advantage of consumers with unfair pricing policies. Which of the following policy options might most effectively enable the government to achieve its objectives in this situation?
a. Do nothing to all.
b. Turn the company into a public enterprise.
c. Use antitrust laws to increase competition.
d. Regulate the firm's pricing behavior.

Answer 1

Answer:

The correct answer is letter "B": Turn the company into a public enterprise.

Explanation:

A State-Owned Enterprise or SOE is a company legally owned by the government to conduct operations on the state's behalf. It allows the government to rule fairly the company to avoid abuses that the former organization could have been carrying out.