Use the Figure Below,which Shows the Linear Demand and Constant

question 38

Multiple Choice

Use the figure below,which shows the linear demand and constant cost conditions facing a firm with a high barrier to entry,to answer the question. If the entry barrier is removed consumers will be better off because

• A)consumers will enjoy greater consumer surplus.
• B)productive efficiency will be restored.
• C)competition will eliminate the shortage caused by the entry barrier.
• D)all of the above

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Definitions:

Historical Cost

The actual cost of an asset at time of purchase.

Legal Liability

Obligations under the law arising from civil actions or claims against an entity or individual, encompassing contractual obligations and tort claims.

Limited Life

A concept depicting that an entity or asset has a finite operational life or duration of existence.

Partnership

A legal business structure where two or more individuals agree to manage and operate a business in accordance with the terms and objectives set out in a Partnership Agreement.