4. "Monopolies perpetuate inflation. When wages rise, a monopoly simply passes on the increased cost in its price. Competitive firms would not be able to do that." Do you agree? What are the differences between how a monopoly and a competitive firm respond to cost increases? 5. The long-run supply curve for gem diamonds is positively sloped because increases in diamond output increase the wages of diamond cutters. Explain why a decision by people to no longer buy diamond engagement rings would have disastrous consequences for diamond cutters but why such a trend would not really harm the owners of firms in the perfectly competitive gem diamond business