Q.3) (12 points) State whether the following statements are true or false.Shortly explain the

answer

1.a)If firms are perfectly competitive, firms face an upward sloping labor supply curve.

2.b)In the long run the firm chooses the optimal level of output by setting MC=p (i.e. the marginal cost of production equal to the output price).

3.c)In a monopsony with a non-discriminating monopsonist the labor

supply curve equals the marginal cost of labor.

4.d)IT workers and computers are (perfect) substitutes in production.