Short-run privatization with fixed output causes no direct changes

Steps:

• Privatization shifts ownership from government to private firms without altering production processes immediately.
• Short run assumes fixed capital and technology, so costs remain unchanged.
• Output is specified as unchanged, preventing any scale effects on efficiency.
• Prices stay the same as demand and supply conditions are unaltered directly.

Why B is correct:

• In the short run, privatization does not affect marginal cost or revenue structures, per standard microeconomic theory, leading to no change in average costs or prices.

Why the others are wrong:

• A assumes cost reductions and price hikes, but short-run fixed factors prevent efficiency gains.
• C implies only cost decrease, ignoring that output fixation blocks any cost adjustment.
• D suggests price increase without cost change, but profit motives require time for implementation.

Final answer: B