A Business-Stealing Externality Is

question 295

Multiple Choice

A business-stealing externality is

• A)an externality that is likely to be punished under antitrust laws.
• B)the negative externality that occurs when one firm attempts to duplicate exactly the product of a different firm.
• C)an externality that is considered to be an explicit cost of business in monopolistically competitive markets.
• D)the negative externality associated with entry of new firms in a monopolistically competitive market.

Understand and apply different methods for establishing probabilities (method of equal alternatives, method of frequency, intuitive judgment, counting method).

Distinguish between situations where each outcome has a different probability and those where they do not.

Recognize that different methods can yield different probabilities for the same event.

Identify scenarios appropriate for the method of equal alternatives.

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Definitions:

Variable Cost

Costs that vary directly with the level of production or output, such as materials and labor, in contrast to fixed costs.

Total Cost

The complete sum of all expenses incurred by a business or individual in producing a good or service.

Fixed Cost

Costs that do not vary with the level of production or sales, such as rent, salaries, or insurance premiums.

Fixed Cost

Costs that do not change with the volume of production, such as rent, salaries, and equipment leases.