By reducing prices, competition encourages ________ transactions, which generates ________ cooperative surplus.
A) more; more
B) more; less
C) less; more
D) less; less

Question

Quizplus · Accepted Answer

By reducing prices, competition encourages more transactions because lower prices make goods and services more accessible to a broader range of consumers. This increase in transactions generates more cooperative surplus, as both consumers and producers benefit from the increased volume of trade. Consumers get the goods or services they value at lower prices, and producers sell more, potentially increasing their overall revenue despite the lower prices.

By Reducing Prices, Competition Encourages ________ Transactions, Which Generates ________

By Reducing Prices, Competition Encourages Transactions, Which Generates