Answer the following statements true (T) or false (F)
1) If a perfectly competitive firm is producing the profit-maximizing output level when their variable cost increase, with no change in the market price, the new profit-maximizing output level will be found below their current output level.
2) Changes in a perfectly competitive firm's variable cost will change the profit-maximizing output level.
3) A perfectly competitive firm's short-run supply curve is its marginal cost curve above the minimum average total cost.
4) If a perfectly competitive firm is incurring an economic loss, it is always cost minimizing to shut down.
5) If a perfectly competitive firm is earning the competitive return, then the market price is equal to the firm's average variable cost.
1) TRUE
2) TRUE
3) FALSE
4) FALSE
5) FALSE
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What will be an ideal response?