Indicate whether each of the following statement is true or false and correct the false statement.

B.1 If the marginal product of capital increases as capital usage grows, the returns to capital are decreasing.

B.2 Marginal revenue product measures the output gained through expanding input usage.

B.3 The marginal rate of technical substitution will be affected by a given percentage increase in the marginal productivity of all inputs.

B.4 If c> 1, increasing returns to scale and decreasing average costs are indicated.

B.5 Average cost exceeds marginal cost at the minimum efficient scaleof plant.

B.6 An increase in total fixed cost will always decrease the degree of operating leverage for firms making a positive net profit.

B.7 A high ratio of distribution cost to total cost tends to increase competition by widening the geographic area over which any individual producer can compete.

B.8 The price elasticity of demand will tend to fall as new competitors introduce substitute product.

B.9 Equilibrium in monopolistically competitive markets requires that firms be operating at the minimum point on the long-run average cost curve.

B.10 An increase in product differentiation will tend to decrease the slope of firm demand curves.

B.11 Perfect competition exists in a market when all firms are price takers as opposed to price makers.

B.12 Downward-sloping industry demand curves characterize perfectly competitive markets.

B.13 A firm might show accounting profits in a competitive market but be suffering economic losses.

B.14 A natural monopoly results when the profit-maximizing output level occurs at a point where MR = MC and long-run average costs are declining.B.15In long-run equilibrium,every firm in a perfectly competitive industry earns zero economics profit.