moved she got a raise of $B. What are A and 4. "If a perfectly competitive firm is making pure economic profit then, in the long run, the firm's output will fall but the industry output will rise." True/False. Explain. False, perfectly competitive mature no profit - 5. A monopoly faces the demand curve p(y) = 90-2y. It's cost function is given by c(y) = y2 . a. Find the marginal revenue, marginal cost, and average cost equations. [Hint: if you're not sure how to do this, make an assumption and complete the problem.] b. Sketch the equations from (a) and the demand curve below, being sure to label all of your axes and the appropriate intercepts. c. What is the profit maximizing level of output? What is the profit maximizing price? Show these result in (b). d. What is the socially optimal (i.e., perfectly competitive) price and output? 6. "If average costs are falling then the homogeneity of the production function must be greater than True/False. Explain