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Scenario 16-1 Escape Vacations Has Recently Announced Intentions to Build a New

Question 316

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Scenario 16-1
Escape Vacations has recently announced intentions to build a new hotel/resort complex in Phoenix, AZ. Assume that the hotel/resort market in Phoenix is characterized by monopolistic competition.
-Refer to Scenario 16-1.As a result of the new Escape Vacations hotel/resort,tourists who stay in Phoenix are likely to experience a


A) product-variety externality, which harms consumers.
B) product-variety externality, which benefits consumers.
C) business-stealing externality, which harms consumers.
D) business-stealing externality, which benefits consumers.

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