When the Loss from a Business-Stealing Externality Exceeds the Gain

question 351

Multiple Choice

When the loss from a business-stealing externality exceeds the gain from a product-variety externality,

• A)firms are more likely to operate at efficient scale.
• B)there are likely to be too many firms in a monopolistically competitive market.
• C)market efficiency is likely to be enhanced by the entry of new firms.
• D)all firms are earning zero economic profit.

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Definitions:

Mammography

An X-ray examination of the breast, used to detect and diagnose breast diseases like cancer.

Compressed

The state of being pressed into less space or condensed, often used in the context of data or materials.

Radiation

The emission and diffusion of rays; a product of X-ray and radium.

Wilhelm Konrad Roentgen

A German physicist who discovered X-rays in 1895, for which he received the first Nobel Prize in Physics in 1901.