Rent-seeking refers to actions or behaviors by individuals or firms that seek to gain an advantage through manipulation or exploitation of the economic system or government policies. When a monopoly engages in rent-seeking, it can cause an even greater loss to society than the deadweight loss caused by the monopoly power alone.

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Rent-Seeking Is

Question 40

Multiple Choice

Rent-seeking is:

A) illegal.
B) a reason that the deadweight loss from a monopoly could be just a small fraction of the actual loss caused by monopoly power.
C) the process for that profit-maximizing monopolies use to determine optimal product quality.
D) another term for advertising.

Correct Answer: