When the Average Total Cost Curves for Firms Are Unaffected

question 15

Multiple Choice

When the average total cost curves for firms are unaffected by the entry of other firms,

• A)it is an increasing-cost industry
• B)it is a decreasing-cost industry
• C)the market's equilibrium price will eventually be restored after the market demand increases
• D)firms will charge a higher price when demand rises
• E)the long-run supply curve is positively sloped

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Definitions:

Malpractice Claim

A malpractice claim is a lawsuit brought against a professional (commonly in healthcare) for negligence or failure to perform their duties to an acceptable standard, resulting in harm to a client or patient.

Professional Indemnity Insurance

A type of liability insurance that helps protect professionals from claims made by their clients for errors or omissions.

GAAP

Generally Accepted Accounting Principles, which are a standard framework of guidelines for financial accounting.

Negligent

Being negligent means failing to take proper care in doing something, resulting in damage or harm to others.