2. The figure below depicts the demand curve of a firm producing cars, together with its marginal cost, average cost, and isoprofit curves. Now consider a case where the demand for cars becomes less elastic (i.e. consumers are less responsive to a price change). Assume that the new demand curve still intersects the marginal cost curve at B. Based on this information, determine whether each of the following statements are true or false. Price, MC (5) 8.090 5,400 1.300 AC 109 105 (a) The demand curve becomes flatter. (b) The profit margin increases. (Hint: the profit margin is price minus marginal cost, at the optimal quantity produced.) (c) The quantity produced increases to above 34 units. (d) The deadweight loss decreases