Figure 16-2
-Refer to Scenario 16-2.As a result of the new Ike's Ice Cream parlor,existing ice cream shops located in Mayville are likely to experience a

Question

Figure 16-2 
-Refer to Scenario 16-2.As a result of the new Ike's Ice Cream parlor,existing ice cream shops located in Mayville are likely to experience a

Quizplus · Accepted Answer

When a new business enters the market, it can lead to a business-stealing externality for existing businesses in the same industry. In this case, the new Ike's Ice Cream parlor may take some of the customers away from existing ice cream shops in Mayville, thereby reducing their profits and potentially harming their business. Therefore, option A is the correct choice. The other options (B, C, and D) are not applicable in the given scenario.

Figure 16-2 -Refer to Scenario 16-2.As a Result of the New Ike's