Final answer:
A firm indeed has a competitive advantage if there is a large difference between what customers are willing to pay and the firm's costs. This is true as it reflects the firm's value creation and market advantage. Therefore, the given statement is true.
Step-by-step explanation:
The statement that a firm has a competitive advantage over its rivals if it manages to create a large gap between the amount customers are willing to pay and the costs the firm incurs is true. This gap is indicative of the value created by the firm and represents the competitive advantage it holds in the marketplace.
For example, competition from firms with better or cheaper products can diminish a business's profitability and potentially force it out of business, demonstrating the importance of maintaining a competitive advantage. Additionally, while consumers benefit from better or less expensive products, it is up to government policymakers to balance the benefits of large-scale production against any potential decline in competition, particularly when businesses grow substantially in size or through mergers.