The business-stealing externality states that entry of a new firms imposes a cost on existing firms because they lose customers.

Name: The business-stealing externality states that entry of a new firms imposes a cost on existing firms because they lose customers.
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The business-stealing externality refers to the negative impact on existing firms when new firms enter the market, capturing some of their customers and thus reducing their sales and profits.

The Business-Stealing Externality States That Entry of a New Firms