Refer to the Information Provided in Figure 13

question 200

Multiple Choice

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.

---

Definitions:

Milligrams

A unit of mass equal to one thousandth of a gram, used in measurements of small quantities of substances.

Grams

A unit of mass equal to one thousandth of a kilogram in the metric system, commonly used for measuring small quantities of material.

Centimeters

A unit of length in the metric system, equal to one hundredth of a meter.

Inches

A unit of length in the Imperial and US customary systems, equal to 1/12 of a foot.