Please answer the following questions. (True/False)
1) Any firm that operates in an imperfectly competitive market faces a downward-sloping demand curve for its product.
2) The term “price setter” refers to a firm that faces a downward-sloping demand curve and must therefore set the combination of output and price that will maximize the firm’s profits.
3) Because a price setter has control over both the level of output it produces and the price it charges, it can select from a number of different combinations of output and price levels that will maximize its profits.
4) The fact that a firm is a price-setter does not ensure it will make a positive economic profit in the short run and over time.
5) For a monopolist to earn a positive economic profit, price has to exceed average total cost at the level of output at which marginal revenue equals marginal cost.
In: Economics
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