Which of the following statements about privatisation is FALSE?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. There is no possibility of exploitation of monopoly power by private companies after privatisation.
- The claim that privatisation eliminates the risk of monopoly exploitation is incorrect because privatised firms can, at times, attain substantial market dominance and misuse their power.
- In the absence of sufficient regulation or competition, a privately controlled monopoly might escalate prices, diminish service quality, or restrict options available to consumers.
- Although privatisation seeks to enhance efficiency, it does not inherently ensure equitable market practices unless adequate oversight and competitive dynamics are established.