What is one reason activists might lobby the government to force firms to produce more output than they normally would in a perfectly competitive market?
A) They value consumer surplus more than producer surplus.
B) They value producer surplus more than consumer surplus.
C) They seek to avoid future regulation.
D) They seek to minimize total surplus.

Question

Quizplus · Accepted Answer

Activists may lobby the government to force firms to produce more output than in a perfectly competitive market if they prioritize consumer surplus over producer surplus. By producing more output, firms may be able to lower prices, which could increase consumer welfare but reduce producer welfare. Activists may believe that this trade-off is worth it to provide affordable goods and services to consumers.

What Is One Reason Activists Might Lobby the Government to Force