Indicate whether the following statements are true or false. Explain why. a. The AFC curve can never rise. b. Diminishing marginal product is a long-run constraint that prevents lower costs. c. The MC curve intersects the AVC and ATC curves at the minimum point along both curves. d. Accounting profit is smaller than economic profit. e. Total cost divided by output is equal to marginal cost. 2. Compare the short-run and long-run cost curves. Explain their differences. 3. Determine whether the following statements are true or false. Explain your answers. a. A firm will make a profit when the price it charges exceeds the average variable cost of the chosen output level. b. To maximize profits in the short run, a firm must minimize its costs. c. If economic profit is positive, firms will exit the market in the short run. d. A firm that receives a price greater than its average variable cost but less than its average total cost should shut down. 4. How do profits and losses act as signals that guide producers to use resources to make what society wants most? 5. Why do competitive firms earn zero economic profit in the long run?