Question

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

Answer 1

Option d is the appropriate choice.

Step-by-step explanation:

• An externality arises whenever the advantages or disadvantages throughout a circumstance doesn't accrue throughout the individuals concerned. Where benefits accumulate, it can sometimes be beneficial, or harmful if premiums increase.
• Business-robbery or stealing seems to be a detrimental externality. Together all hotels shall be solely responsible for beginning a new business on an equal level.

Some other alternatives given do not apply to the conditions in question. So option d may become the correct one.