57.When existing firms lose customers and profits due to entry of a new competitor, a Select one: O a. a.predatory-pricing externality occurs. O b. b.consumption externality occurs. c. c.business-stealing externality occurs. Od. d.product-variety externality occurs. correct The correct answer is: c.business-stealing externality occurs.

57.When existing firms lose customers and profits due to entry of a new competitor, a Select one: O a. a.predatory-pricing externality occurs. O b. b.consumption externality occurs. c. c.business-stealing externality occurs. Od. d.product-variety externality occurs. correct The correct answer is: c.business-stealing externality occurs.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter11: Public Goods And Common Resources

Section: Chapter Questions

Problem 2PA

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1. Decide whether the following are true, false, or uncertain and thoroughly explain your reasoning. (a) If AC > MC at the firm's chosen output level, then the firm is producing on the upward sloping part of its AC curve. (b) When an unregulated market creates positive externalities it tends to produce too little and when it creates negative externalities tends to produce too much. (c) Charging a toll on an uncongested highway increases total surplus because this creates revenue to pay for building and maintaining the highway. (d) Charging a toll on a congested bridge increases total surplus because it reduces the number of drivers and thereby reduces congestion. (e) If a public good cannot be paid for through user fees, then it should not be provided. (F) The costs of National Parks should be covered by charging admission fees, because we shouldn't have National Parks if the people who use them are not willing to pay enough to cover these costs. (g) You have been offered an…
3. a) Suppose a monopolistically competitive firm operates in a long run which produces 40 umits of output at 120 taka per-unit cost (average total cost). Also, MC of producing 40-unit output is 60 taka. By using this information, show the long run situation of a monopolistically competitive firm in an appropriate diagram. Show all the relevant information in your diagram. b) Calculate cxcess capacity if socially efficient output is 100 units. Show it in graph too. [Note: a) and b) are related questions]
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