Which of the following would be considered rent-seeking activity?
A)A software firm using lawsuits to drive competitors out of business.
B)A technology firm investing in extremely expensive capital equipment.
C)A large firm trying to charge lower prices than its competitors.
D)An auto manufacturer using features and styling to differentiate its models from its competitors'.

Question

Quizplus · Accepted Answer

Rent-seeking activity refers to using resources (such as time, money, and effort) to gain wealth without creating any new wealth. Using lawsuits to drive out competitors is an example of rent-seeking because the firm is not creating anything new, but rather using legal means to gain a competitive advantage.

Which of the Following Would Be Considered Rent-Seeking Activity