A9. The diagram below depicts a firm's short-run production function and two isoprofit lines (n, and It: ). If the firm's optimal production point has switched from point B to point A, which of the following must have occurred? Output TB TA B Labour A. a decrease in the price of labour; an increase in profits B. an increase in the price of labour; an increase in fixed costs; no change in profits C. a decrease in the price of labour; a decrease in fixed costs; a decrease in profits D. an increase in the price of labour; an increase in profits A10. Which of the following statements is true? A the Coase Theorem may lead to a Pareto efficient outcome in the presence of externalities B. the existence of externalities means that an outcome must be Pareto inefficient C. reducing the level of externalities must be associated with a Pareto improvement D. none of the above