When the Loss from a Business-Stealing Externality Exceeds the Gain

question 201

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 economic losses.

---

Definitions:

Locus

(pl., loci) The place on the chromosome at which the gene for a given trait occurs (i.e., a segment of the chromosomal DNA containing information that controls some feature of the organism); also called gene locus.

Homozygous

Having a pair of identical alleles for a particular locus. Compare with heterozygous.

Heterozygous

Describes an individual having two different alleles for a specific gene.

Alleles

Genes governing variation of the same character that occupy corresponding positions (loci) on homologous chromosomes; alternative forms of a gene.