Exhibit 8.11 -Refer to Exhibit 8.11,which Shows a Perfectly Competitive Firm in Perfectly

question 10

Multiple Choice

Exhibit 8.11

-Refer to Exhibit 8.11,which shows a perfectly competitive firm in an increasing-cost industry.Suppose long-run equilibrium settles at d_c.Why does the market price not fall back to the initial equilibrium level at a?

• A)because each firm experiences a lower average total cost and equilibrium price
• B)because each firm experiences the same equilibrium price but a greater average total cost
• C)because each firm experiences the same equilibrium price but a lower average total cost
• D)because each firm's average total cost curve has increased
• E)because each firm's average total cost curve has decreased

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Definitions:

Third-Party Beneficiaries

Individuals or entities that benefit from a contract despite not being a party to the contract themselves.

De Facto Employees

Individuals who work in conditions similar to employees but without formal recognition or the legal rights of employees, often in a jurisdictional gray area.

Common Law Duty

Obligations or standards of conduct established through judicial decisions, rather than statutory laws, that individuals and entities are expected to follow.

Negligence

A failure to behave with the level of care that someone of ordinary prudence would have exercised under the same circumstances, often resulting in harm or damage.