What is the likely impact on production costs if a natural monopoly is divided into several smaller companies by regulators?

Monopoly MCQs for PPSC, FPSC, NTS, and Pakistan government job tests. Select an option below, then read the explanation.

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Subject
Monopolyeconomics-mcqs › monopoly
Published
30 May 2019
Last updated
28 May 2026

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Explanation

When a natural monopoly is split into multiple smaller firms, the loss of economies of scale typically causes production costs to rise.

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