Rent-seeking refers to the activities undertaken by firms to secure a monopoly position, such as lobbying for government regulations that favor their business or engaging in anticompetitive practices to drive out competitors. While rent-seeking may result in excess profits for a monopoly, it is not the same as the economic rent that a monopoly may earn due to their market power.

Solved

Rent-Seeking Is

Question 18

Multiple Choice

Rent-seeking is:

A) the loss in consumer surplus due to monopoly power in a market.
B) the collusive practices undertaken by dominant firms in an oligopoly.
C) comprises the excess profits that are associated with a monopoly.
D) comprises the activities that are directed towards securing a monopoly position.
E) is the economic rent secured by monopoly firms.

Correct Answer: