Business Stealing Arises When

question 51

Multiple Choice

Business stealing arises when

• A) Some of a new entrant's sales are due to new buyers in the market
• B) Some of a new entrant's sales are due to stolen ideas
• C) Some a new entrant's sales come at the expense of existing firms, whose sales contract after the new firm enters the market
• D) A and B

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Definitions:

Price Ceiling

A government-imposed limit on how high a price can be charged on a product or service, intended to protect consumers.

Market Price

The amount of money a buyer is willing to pay and a seller is willing to accept for a good or service in a competitive market.

Shortage

A market condition in which the demand for a product or service exceeds its supply, often leading to higher prices.

Binding Price Ceiling

A government-imposed price limit on goods or services that is set below the market equilibrium price, leading to shortages.