True or False

______ 1. In the theory of perfect competition, price is smaller than marginal revenue.

______ 2. Perfect competitive firm is a price taker.

______ 3. A monopoly firm always earns economic profit.

______ 4. An increasing-cost industry is an industry in which average total costs decrease as industry output increases.

______ 5. Free entry is the basic reason that monopolistically competitive firms have excess capacity.