1. Under what conditions should a competitive firm shut down in the short run? Briefly explain why. (10 points) 2. a) Using appropriate graphs, explain how and why the demand curve for monopolist firm differs from the demand curve of a firm in perfect competition? b) What do firms in perfectly competitive markets and monopolistic competitive markets have in common? How are they different in the long run? (20 points) 3. For each of the following observations about an industry briefly explain whether it characterizes a firm that is perfectly competitive or not perfectly competitive. a) /The firms are spending lots of money on advertising. b) The firms are currently making economic profits in the short run. c/Two firms produce 60 percent of the total industry output. d) The firms issue coupons offering a price discount. (20 points)