If Activists Successfully Lobbied Government to Force Firms to Produce

question 26

Multiple Choice

If activists successfully lobbied government to force firms to produce more output than they normally would in a perfectly competitive market,

• A) consumer surplus would decline.
• B) producer surplus would increase.
• C) taxation would solve the problem.
• D) total surplus in the market would decline.

---

Definitions:

Venture Capitalists

Investors who provide capital to startups and early-stage companies with high growth potential in exchange for equity stakes or ownership interest.

Seed-stage Companies

Early-stage businesses that are beginning to develop their product or service, typically seeking seed funding to facilitate growth and development.

Invested

Committed money, resources, or effort into something with the expectation of achieving a profit or beneficial result.

Seed-stage

The initial phase of a startup's development, where the focus is on product development and market research, often funded by seed capital.