There Are Externalities Associated with Entry into a Monopolistically Competitive

question 157

Multiple Choice

There are externalities associated with entry into a monopolistically competitive market.The product-variety externality arises because:

• A)new firms offer products different to the existing firms, and consumers value choice
• B)incumbent firms offer a range of differentiated products, which is valued by consumers
• C)entry increases competition and lowers prices, which benefits all consumers
• D)firms post a price above marginal cost and are eager to sell too many units

---

Definitions:

Routine Requests

Standard or common inquiries or demands made in a workplace or professional context, often relating to information, services, or actions.

Direct Approach

A communication strategy that is straightforward and clear, without indirectness or evasion.

Negative Responses

Reactions that express disagreement, dissatisfaction, or other forms of refusal or denial.

Indirect Method

An approach in communication or problem-solving that is not straightforward and uses alternative means, often involving suggestion rather than direct expression.