When a New Firm Considers Entering a Market, It Takes

question 233

Essay

When a new firm considers entering a market, it takes into account only the profit it would make. What are the two external effects that occur in the market that the firm does not consider?

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Definitions:

Gilbert Stuart

An American painter renowned for his portraits of prominent figures, most famously George Washington.

Charles Willson Peale

An American painter, soldier, and naturalist known for his portraits of leading figures of the American Revolution and the early United States.

John Trumbull

An American artist known for his historical paintings, particularly those that capture scenes from the American Revolutionary War.

American Revolution

The period (1765-1783) during which the thirteen American colonies fought for and gained independence from British rule.