Answer each of the following statements True/False/Uncertain. Give a full explanation of your answer. A fully labeled graph is a welcome addition to any answer (if applicable), though it is not necessary.

A) Average fixed costs are strictly decreasing as output increases. (5 marks)

B) Cobb-Douglas production (for example, q = AKaL b ) can exhibit increasing, decreasing, and constant returns to scale. (5 marks)

C) In general, the U-shape associated with the short-run average cost curve is mainly due to declining average fixed costs and decreasing marginal returns to labor. (5 marks)

D) If an owner wants to ensure a manager's incentives are aligned with the company, the manager's salary should be contingent on the firm's performance. (5 marks)

E) Free entry and exit is a condition associated with short-run perfect competition. (5 marks)