3. Determine whether the following statements are true or false. Explain your answers.

a. A fi rm will make a profi t when the price it charges exceeds the average variable cost of the chosen output level.

b. In order to maximize profi ts in the short run, a fi rm must minimize its costs.

c. If economic profi t is positive, fi rms will exit the industry in the short run.

d. A fi rm that receives a price greater than its average variable costs but less than its average total costs should shut down.