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A Car Dealership Has Both a Used Car and a New

Question 34

Multiple Choice

A car dealership has both a used car and a new car division. A single service department serves both divisions. The service department performs the dealer prep work on the new cars
And installs any custom features that may be ordered by a customer. It also reconditions used
Cars acquired by the firm
To make them more salable. The dealership is considering expanding its new car division,
Which will involve a cost to the used car division since they will not be able to get as fast a
Turnover on their used cars. This is an example of a negative externality known as


A) pollution and congestion.
B) resource exhaustion.
C) bureaucratization and internal conflict.
D) cannibalization.

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