Question

An accurate description of privatization is that Multiple Choice it started in China in the early 1980s. it involves replacing a state-owned monopoly with a private monopoly. it is most successful whencountries adopt communism. when newly privatized firms are protected from foreign competition, they have little incentive to restructure their operations to become more efficient. in today's context, a country runs the risk of experiencing a serious economic crisis if it liberalizes and privatizes state-owned enterprises.

Answer 1

Answer: When newly privatized firms are protected from foreign competition, they have little incentive to restructure their operations to become more efficient.

Explanation:

Privatization of state owned companies refers to the process of making them private firms that are owned by other parties apart from the Government.

This is usually done to the improve efficiency of the company as state owned firms can be inefficient resulting from being a monopoly.

If firms that are newly privatized are protected from foreign competition, the company would just become a private monopoly so they will not have any incentive to restructure their operations to become more efficient thereby defeating the whole point of making them efficient in the first place.