Question: A columnist in the Wall Street Journal made the following observation:
"The oil refining business is just too competitive, which is great for consumers, but not shareholders." Source: James B. Stuart, "coping with the inevitable: the losers in your portfolio", Wall Street Journal, December 3, 2008. Briefly explain why the high level of competition in the oil refining industry is good for consumers but bad for the shareholder to own these firms. As competition increases,
Which is the best answer:
A. Variety for consumers will increase and profits for shareholders will decrease.
B. Variety for consumers will decrease and consumers demand for shareholders will decrease.
C. Variety for consumers will increase and marginal cost for shareholders will increase.
D. Price for consumers would decrease and excess capacity for shareholders will decrease.
E. Price for consumers will increase and profits for shareholders will decrease.