Privatisation

Question 1

idea behind is

Answer 1

to see greater efficiency

Question 2

adv

Answer 2

• Minimise deadweight loss seen in monopoly levels of output = consumer surplus gains
• Higher allocative efficiency
• Reduction in X inefficiency – as firms incentivised to reduce costs
• Efficiency incentive which drives dynamic efficiency
• greater competition - less x inefficient and low price/ high quality
• ideological argument is that it puts ​utilities into the hands of the people​, since they can own shares. Workers will be more motivated as they know their hard-work will be rewarded by high dividends.

Question 3

disadv

Answer 3

• Limited competition = p and a inefficiency
• Loss making services cut even if socially desirable
• Loss of natural monopoly and loss of economies of scale benefits = P inefficiency
• externalities and inequality