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.

A) will be equal to
B) may be greater than
C) will be less than
D) will be everything beneath

Net Social Gain

The total benefit to society from producing and consuming a good or service, taking into account both the private benefits and costs and any external benefits or costs.

Innovation

The process of creating new products, services, processes, or technologies that deliver value to society or the market.

Competition

The rivalry among sellers trying to achieve such goals as increasing profits, market share, and sales volume by varying the elements of the marketing mix.