For Which of the Following Reasons Is the Existence of Business-Stealing

question 141

Multiple Choice

For which of the following reasons is the existence of business-stealing externalities and product-variety externalities unique to profit-maximising firms in a monopolistically competitive market?
(i) there are few firms in the market, but each firm produces several different varieties of the product
(ii) there are many firms in the market, each with a different variety of the product
(iii) profit-maximising price exceeds marginal cost

• A)(i) and (iii) only
• B)(ii) and (iii) only
• C)(i) only
• D)(ii) only

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Definitions:

Discharged

The completion or termination of an obligation such as a debt or legal duty.

Liability

The state of being legally responsible for something, particularly in terms of debts or legal actions.

Check

A negotiable instrument, commonly used for transactions, instructing a bank to pay a specific amount from the drawer's account to the payee or bearer.

Warranties

Legally binding promises or guarantees about the condition, quality, or performance of goods or services sold, which are enforceable under the sale of goods laws.