If the government decides to privatise a major public sector industry, what might be an unintended consequence?
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. Potential monopolistic practices.
The unintended consequence of privatising a major public sector industry could be potential monopolistic practices. While privatisation often improves efficiency and brings in higher revenue, it may also reduce competition if only a few private players dominate the market. Such concentration of power can lead to price manipulation, exploitation of consumers, and reduced service accessibility, especially in essential sectors like energy or transport. Unlike the positive impacts of reduced corruption or efficiency gains, monopolistic behaviour undermines market fairness and may hurt long-term economic welfare, making it a critical unintended drawback of privatisation.