1. A firm is earning positive accounting profits of $1,000 and negative economic profits of $2,000. Therefore, the firm's

A.explicit costs must be $2,000

B.implicit costs must be $2,000

C.explicit costs must be $3,000

D.implicit costs must be $3,000

E.profits must be normal

2 A firm operating in a perfectly competitive market cannot increase its profit. Which of the following must be true in the short run?

A.A decrease in output will leave profits unchanged.

B.The firm cannot be earning positive economic profit.

C.The firm's average total costs equal marginal costs.

D.The firm's demand curve is downward sloping.

E.The firm's marginal cost equals its price.