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that the number of firms in the market may not be the "ideal" one. That is,toughest p90x workout, there
may be too much or too little entry. One way to think about this problem is in
terms of the externalities associated with entry. Whenever a new firm considers en-
tering the market with a new product,buy cheap true religion jeans, it considers only the profit it would make.
Yet its entry would also have two external effects:
384 PA R T F I V E F I R M B E H AV I O R A N D T H E O R G A N I Z AT I O N O F I N D U S T R Y
N The product-variety externality: Because consumers get some consumer surplus
from the introduction of a new product,chi flat iron limited edition, entry of a new firm conveys a
positive externality on consumers.
N The business-stealing externality: Because other firms lose customers and