Refer to the information provided in Figure 13.9 below to answer the question(s) that follow. Figure 13.9
-Refer to Figure 13.9. If competition is introduced into the market, the net social gain may be greater than the area BEC to the extent that
A) the firm may have engaged in rent-seeking behavior, the cost of which would also be avoided.
B) society may value the increase in consumer welfare on equity as well as efficiency grounds.
C) firms facing competition may have a greater incentive to cut costs and innovate, which results in gains to society.
D) All of the above are correct.

Question

Refer to the information provided in Figure 13.9 below to answer the question(s) that follow.  Figure 13.9
-Refer to Figure 13.9. If competition is introduced into the market, the net social gain may be greater than the area BEC to the extent that
A) the firm may have engaged in rent-seeking behavior, the cost of which would also be avoided. 
B) society may value the increase in consumer welfare on equity as well as efficiency grounds. 
C) firms facing competition may have a greater incentive to cut costs and innovate, which results in gains to society. 
D) All of the above are correct.

Quizplus · Accepted Answer

All the options provided contribute to the potential increase in net social gain when competition is introduced into a market. Competition can reduce rent-seeking behavior (A), enhance consumer welfare and equity (B), and incentivize firms to innovate and cut costs (C), all of which are beneficial to society.

Refer to the Information Provided in Figure 13