Question 1
Refer to the information provided in Figure 13.9 below to answer the question(s) that follow.
Refer to Figure 13.9. If competition is introduced into the market the net social gain ________ the area
BEC to the extent that firms facing competition may have a greater incentive to cut costs and innovate which result in gains to society.
◦ will be equal to
◦ may be greater than
◦ will be less than
◦ will be everything beneath
Question 2
Refer to the information provided in Figure 13.9 below to answer the question(s) that follow.
Refer to Figure 13.9. If Ohio Edison is regulated to act as a perfectly competitive firm (instead of the monopoly level) ________ the area
FGBC.
◦ producer surplus would increase by
◦ consumer surplus would increase by
◦ welfare loss would be represented by
◦ net social gain would be reduced by