ECONOMICS
COMPETITION AND MARKET STRUCTURES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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You decide to stop snacking between meals.
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Your new bicycle goes faster than you expected
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Your shoe store stops selling your favorite style.
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You enjoy looking at your neighbor’s garden.
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Detailed explanation-1: -An externality is benefit or cost that affects someone who is not directly involved in the production or consumption of a good or service; Examples of a negative externality include pollution, while something such as a technology spillover is an example of a positive externality.
Detailed explanation-2: -the cost borne by a third party not involved in the trade is not reflected in the market price. The best example of a positive externality is: roller coaster rides.
Detailed explanation-3: -The correct answer is converting a derelict empty lot to a public vegetable garden. A positive externality is a beneficial act and advantageous to the entire society.
Detailed explanation-4: -1] Perfect Competiton. In a perfect competition market structure, there are a large number of buyers and sellers. 2] Monopolistic Competition. This is a more realistic scenario that actually occurs in the real world. 3] Oligopoly. 4] Monopoly.