When Incumbent Firms Lose Customers and Profits Due to Entry

question 184

Multiple Choice

When incumbent firms lose customers and profits due to entry of a new competitor,what type of externality occurs

• A)a predatory pricing externality
• B)a production externality
• C)a business-stealing externality
• D)a product-variety externality

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Definitions:

Lakes

Large bodies of water surrounded by land, usually freshwater and derived from glacial activity, tectonic movements, or old river beds.

Snake River Plain

A geographic feature in the U.S. characterized by a wide, flat valley cutting through Idaho, known for its volcanic geology.

Groundwater

Water that is located beneath the earth's surface in soil pore spaces and in the fractures of rock formations.

Huge Springs

Large natural outlets where groundwater flows out of the ground, often the result of an aquifer being filled to the point that the water overflows onto the land surface.