In the long run, if price is below the average variable cost, the perfect competitive firm should?

a)keep operating

b)shut down.

c)set the price above average cost

d)decrease sales.

e)increase sales.

Which of the following statements about the market structure of monopoly are correct?

1. A monopoly involves a market one or a few major firms.
2. The monopolist can charge any price she wishes and still operate at maximum profit.
3. The demand curve faced by the monopolist is the same as the total industry demand curve.
4. The monopolist is a "price taker."
5. The monopoly is normally a huge firm such as Wal-mart.

a)Statements I and IV are the only correct statements.

b)Statement III is the only correct statement.

c)Statements II and V are the only correct statements.

d)Only statement V is correct.

e)Only II is correct.