Limited personal liability is an advantage for

The figure above shows the costs associated with producing paper. When paper is produced, there is some pollution runoff into a lake

According to the Coase Theorem, if the transactions costs are low and there are only a few people involved, the output will equal ________ tons of paper if ________ own the lake. A) 3; only the lakeside residents B) 3; either the firms or lakeside residents C) 4; the firms D) 4; either the firms or lakeside residents

A firm that is first to the market with a new product frequently discovers that there are design flaws or problems with the product that were not anticipated. How do these problems affect the innovating firm?

A) The firm is protected by a first-mover advantage: initial design flaws tend not to harm a firm significantly because consumers resist changing products for fear of incurring high switching costs. B) They reduce profits for the new innovations and open the door to competitors who can enter the new market with a better product. C) The firm's cost increases as it improves the product but it will not be able to raise its price for fear of alienating customers. Consequently, its profits will erode although its market share remains secure. D) Because these design flaws were not anticipated, consumers tend to be more forgiving and are likely to remain loyal to the company and its products.