1) Which of the following is true for a monopoly market?

1. A monopolist firm is a price maker.
2. In a monopoly market, the market demand is always high.
3. A monopolist firm controls the supply of resources.
4. The government does not allow other sellers to enter the market.

2)Firm D is a perfectly competitive firm. What should the firm do in short run when it faces the following conditions:

Average total cost = $60

Average variable cost = $40

Marginal cost = $45

Marginal revenue = $45

1. The firm should raise the price
2. The firm should shut down
3. The firm should increase production
4. The firm should decrease production
5. The firm should not change its quantity produced

3) What is true about a perfectly competitive market?

1. An individual firm is a price maker.
2. An individual firm can influence the market price.
3. All firms produce at a quantity such that MR = AVC.
4. All firms maximize profit.

4) Hubert owns a scooter store. Last year his average total cost of selling a scooter was $1,000. If he expands the size of his store this year and sees his average total cost increase. What is true about the scooter store?

1. The scooter store experiences economies of scale.
2. The scooter store experiences diseconomies of scale.
3. The scooter store experiences constant return to scale.
4. The long run ATC curve of the scooter store is U-shaped.
5. The long run ATC of the scooter store is decreasing.