Public/Private , Regulated/Deregulated

Question 1

Arguments fro public ownership?

Answer 1

• owned by state and therefore EOS from natural monopoly
• redistribute income and wealth cuz the govt doesn’t have a profit motive, they prioritise all eff
• in the case of public goods no business would provide the good

Question 2

argument against state ownership?

Answer 2

• all eff leads to less means for dynamic eff
• opportunity cost of profit max
• less incentive for x- efficiency
• govt failure
• lack of profit motive
• cost of nationalisation

Question 3

advantages of privatisation?

Answer 3

• profit motive
• dynamic eff means
• could earn tax rev
• promotes competition

Question 4

disadvantages of privatisation?

Answer 4

• regulation may be needed
• price could rise
• could lead to monopoly abuse as they are short term profit maximisers
• EOS