Connecting public roads in one city to public roads in another is an example of a _____ problem where larger governments can help smaller governments.
a. negative externalities
b. economies of scale
c. prisoners' dilemma
d. coordination problem
Question 2
Incumbents are unaffected by fixed costs of entry while potential entrants are affected by them because
A) for potential entrants the cost is avoidable, while for the incumbent, it is not.
B) fixed costs will be greater for the potential entrant than for the incumbent.
C) fixed costs are zero for the incumbent.
D) incumbents will act to prevent entry at all costs.
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