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. Regulate the firm's pricing behavior.
b. Turn the company into a public enterprise.
c. Use antitrust laws to increase competition.
d. Do nothing at all.

Answer 1

Answer: Option B -- Turn the company into a public enterprise.

Explanation: Public enterprise can be defined as the type of organization, establishment or business that is fully or partly owned by the government but controlled by the public body/authority. Therefore, if the government wants to regulate the price of private company, which is duly imposed on the consumer, it's a must they go for public enterprise by turning the company into a public enterprise.