A government splits a nationalised rail service and then sells it to five private companies. The biggest of these firms dominates the four smaller firms. How will these changes affect the market structure for rail services?
- AIt will change from monopoly to monopolistic competition.
- BIt will create an oligopoly with the possibility of price leadership.
- CIt will encourage freedom of entry due to lower capital costs.
- DIt will guarantee ticket prices based on average costs.