Scenario 16-4 Delish, a Moderately Priced Restaurant, Has Recently Announced Intentions to Intentions

Scenario 16-4
Delish, a moderately priced restaurant, has recently announced intentions to open a restaurant in Boston, MA. Assume that the restaurant market in Boston is characterized by monopolistic competition.
-Refer to Scenario 16-4. As a result of the new restaurant, existing restauranteurs in Boston are likely to experience a

A) product-variety externality, which is a negative externality.
B) product-variety externality, which is a positive externality.
C) business-stealing externality, which is a negative externality.
D) business-stealing externality, which is a positive externality.

Correct Answer:

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