Examlex
Which of the following statements about adjustment problems is/are true?
Excess Capacity
The situation where a company is producing less than its full potential output due to lack of demand or other constraints.
Efficient Scale
The level of production at which a firm achieves the lowest average total cost, with economies of scale fully exploited.
Business-Stealing Externality
Negative impacts on existing firms due to entry of new competitors, which can steal customers and reduce profits.
New Firms
Companies that have recently entered the market, bringing innovation, competition, and potentially disrupting established market dynamics.
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