Suppose that a telecommunications company controls a large share of the national market. The government believes that the economies of scale in this industry are not significant, and therefore, multiple smaller firms would be able to provide lower prices.
Which of the following policy options might most effectively enable the government to achieve its objectives in this situation?
A. Turn the company into a public enterprise.
B. Regulate the pricing behavior.
C. Do nothing at all.
D. Use the law to increase competition.