Everything Else Remaining Unchanged,if a New Seller Enters a Market

question 177

Multiple Choice

Everything else remaining unchanged,if a new seller enters a market to compete with an existing monopoly that is enjoying economies of scale,it will lead to ________.

• A) higher profits for both firms
• B) higher profits for the existing firm
• C) lower profits for the existing firm
• D) greater market power for the existing firm

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Definitions:

Landed Costs

The total price of a product once it has arrived at a buyer's doorstep, including the purchase price, transportation fees, customs, duties, and other taxes.

Sales/FOB Terms

Terms used in international trade to define when and where the responsibility and ownership of goods are transferred from the seller to the buyer; "FOB" stands for Free On Board.

Commodities

Basic goods used in commerce that are interchangeable with other goods of the same type, typically used as inputs in the production of other goods or services.

Distinctives

Unique characteristics or features that differentiate a product, service, or organization from its competitors.