The Business-Stealing Externality Associated with Monopolistic Competition Arises Because in Monopolistically

question 115

Multiple Choice

The business-stealing externality associated with monopolistic competition arises because in monopolistically competitive markets:

• A)profit-maximising firms charge a price higher than marginal cost
• B)profit-maximising firms produce differentiated products
• C)there are few barriers to entry
• D)profit-maximising firms produce at a less-than-efficient scale

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Definitions:

Serial Entrepreneur

A person who repeatedly starts new businesses, moving from one venture to another, and often leveraging the experiences and capital from previous successes.

Benefit Corporation (B-Corp)

A type of legal structure for a business that aims to generate profit while also focusing on positive impacts for society, workers, the community, and the environment.

Family Enterprising

The involvement of family members in developing and managing business ventures or entrepreneurial activities.

Entrepreneurship

The act of creating, launching, and managing a new business venture, often characterized by innovation and risk-taking.