PART I: State whether the following statement is true or false. Support your answer with brief explanation. 1. An industry is defined as firms that have the same resources and capabilities. [2 marks] 2. If the costs to produce Product A, Product B and Products A and B together are 550, 757, and 1,300 the process exhibits economies of scope. [2 marks] 3. A coal manufacturer purchasing a nuclear power plant is a vertical integration. [2 marks] 4. The less elastic is the demand for a firm's product, the greater is that firm's market power. [2 marks] 5. Suppose that a profit maximizing monopolist has a constant marginal cost equal to 2 and faces the following inverse demand: P = 10 - 20. The Learner Index at profit maximizing price is 0.67. [2 marks]