1)Is it possible for monopolistic firms to make supernormal profit/ positive profit in long run? Provide explanation.

2)Why do profit maximizing firms always produce output at MC = MR? Draw graph and use example.

3)Concentration ratio determines the extent of market power a cartel can exhibit in an oligopoly market. Provide explanation in support of this statement.

4)Based on the following information, state whether the perfectly competitive firm should shut down or continue to operate in the short run.

Q= 40,P= $15,TFC= $200,TVC = $700

Draw the relevant graph based on firm's decision in this particular case.(Hint: calculate average costs first).

5) Since monopoly is a price searcher and has no competitor in the market, it is guaranteed that monopoly will always make profit. True or false? Provide explanation in support of your answer. Draw graph.