When competition is present and private ownership rights are clearly defined and securely enforced by the legal system, business firms will have a strong incentive to
A) innovate and develop better products and lower cost production methods.
B) spend time attempting to plunder (take) the resources of others.
C) engage in wasteful activities that increase the cost of producing goods and services.
D) use resources during the current period rather than conserving them for the future.

Question

Quizplus · Accepted Answer

Competition and private ownership rights provide firms with the incentive to innovate and develop better products and lower cost production methods to remain competitive in the market. This leads to an increase in efficiency and productivity, which can benefit consumers through lower prices and better quality products. Spending time attempting to plunder resources or engaging in wasteful activities would be counterproductive in a competitive market environment. Similarly, using resources without conserving them for the future would undermine a firm's long-term viability and profitability.

When Competition Is Present and Private Ownership Rights Are Clearly