When a New Firm Considers Entering a Market, It Takes

question 233

Essay

When a new firm considers entering a market, it takes into account only the profit it would make. What are the two external effects that occur in the market that the firm does not consider?

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Definitions:

Incandescent Bulb

A type of lighting that works by heating a filament inside a bulb until it glows, producing light.

Inert Gas

A gas which does not undergo chemical reactions under a set of given conditions, often used as a protective atmosphere.

Tachometer

An instrument used to indicate shaft speed.

Engine Rpm

Revolutions per minute of an engine; a measure of the engine's speed.