A business-stealing externality is
a. an externality that is likely to be punished under antitrust laws.
b. the negative externality that occurs when one firm attempts to duplicate exactly the product of a different firm.
c. an externality that is considered to be an explicit cost of business in monopolistically competitive markets.
d. the negative externality associated with entry of new firms in a monopolistically competitive market.
d
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Why do many people choose to not read the manuals included with their new computer?
A) They perceive that learning by doing decreases costs faster than learning by reading. B) They perceive that learning by doing is more enjoyable than learning by reading. C) They perceive that learning by reading is not sophisticated. D) They perceive that learning by doing is better than learning by reading.
Consider the following output-choice game for two firms:
Firm 2 - low Firm 2 - medium Firm 2 - high Firm 1 - low 150, 150 100, 160 75, 100 Firm 1 - medium 160, 100 110, 110 50, 75 Firm 1 - high 100, 75 75, 50 0, 0 What is the outcome of the game if both firms use maximin strategies? A) Both firms choose low output levels. B) Both firms choose medium output levels. C) There is no clear outcome under a maximin strategy for both firms. D) There are two possible maximin outcomes --- Firm 1 chooses medium and Firm 2 chooses low, or Firm 1 chooses low and Firm 2 chooses medium.
Why does entry primarily occur?
a. When a firm has the potential to profit from making a good b. When a firm has the potential to engage in perfect competition c. When a market contains very few competitors d. When goods in a market are in high demand
Suppose the central bank implements a monetary contraction that is fully expected by financial market participants. Given this information, we would expect
A) stock prices to rise. B) stock prices to fall. C) stock prices to remain unchanged. D) an ambiguous effect on stock prices. E) stock prices to fall and the interest rate to rise.