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

question 105

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 negative economic profit.

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Definitions:

Uniform Commercial Code

A comprehensive set of laws governing commercial transactions in the United States, intended to standardize laws across states.

Perfect Tender Rule

A principle in commercial law that requires goods delivered under a sales contract to exactly meet the terms of the contract in quality, quantity, and manner of delivery.

Rightfully Reject

pertains to the legitimate refusal of an offer, goods, or services that do not meet contractual or predetermined criteria or standards.

Small Dent

A minor indentation or damage on a surface, typically referring to physical objects like vehicles.