5. Indicate whether each of the following statements describe a perfectly competitive firm, a monopolistically competitive firm, and/or a monopolist.

a. A firm is producing at the output where MR equals MC and charges the price according to the consumers’ willingness to pay.

b. In the long run, a firm is producing at the profitmaximizing level of output, where the price is

$13 and the average total cost (ATC) is $10.

c. A firm is producing at the profit-maximizing level of output, where the price is $14, the ATC is $10, and the marginal cost (MC) is $7. An increase in output will decrease both the ATC and the firm’s profit.

d. A firm is producing at the profit-maximizing level of output where the price is $13 and the ATC is $15, which causes the firm to exit the market in the long run.