A hotel owner, having heard that new hotels plan to open in his area, says, ‘we have too many hotels in this
A hotel owner, having heard that new hotels plan to open in his area, says, "we have
too many hotels in this town already. Statistics show that vacancy rates average 20
percent on any given night." Assuming this is correct, evaluate his negative assessment
of the situation in terms of business-stealing and product-variety externalities.
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