Rent-seeking behaviour, unlike profit maximising behaviour in competitive markets, wastes society's scarce resources.

Question

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Rent-seeking behaviour involves trying to obtain economic rents (i.e. profits above what would be earned in a competitive market) by manipulating government policies or regulations, rather than by producing new goods or services. This often leads to a misallocation of resources, as individuals and firms focus on gaining privileged access to the market rather than on increasing efficiency or innovation. This ultimately reduces economic welfare and slows down growth. Therefore, rent-seeking behaviour is considered a form of economic inefficiency and waste of scarce resources.

Rent-Seeking Behaviour, Unlike Profit Maximising Behaviour in Competitive Markets, Wastes