Indicate whether each of the following statements is true or false and explain why.
A. False. It is still beneficial for the firm to produce in short run when firm incur an economic loss in short run. When AvC<price<AC then firm should produce in short run.
b. False. Monopoly can’t always earn economic profit because it can set price but not quantity. It can set only one either price or quantity
c. True. Due to free entry and exit, all firms in perfect and monopolistic competition, earns only normal profit.
d.true when MC>0 because profit is maximised when MR=MC and revenue is maximised when MR=0
f.false. Price is always greater than MR.
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