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:

Occipital Lobes

The region of the brain located at the back of the head, responsible for processing visual information.

Visual Cortex

The visual cortex is the part of the brain that processes visual information, enabling the perception of shapes, colors, and motion.

Mirror System

A network of neurons in the brain that is thought to be involved in understanding the actions of others, empathy, and learning through imitation.

Lack of Empathy

A deficiency in the ability to understand and share the feelings of another, often resulting in difficulties in social interactions and relationships.