Which one of the following statements is true under perfect competition? Select one: oa_ Consurmer surplus is maximized. o b. Each firm's demand curve is the market demand curve. O c. Firms choose output so that price equals marginal cost in the long run, but firms may choose to set price above marginal cost in the short run to maximize profits. o d. Each firm's marginal cost curve is determined by the market price. oe_ A firm can sell all it can produce that the market price. Figure 4.2 (use for questions 8-9) PRICE MC AVC 2 D=MR QUANTITY Consider the market for wheat. Suppose many farmers with identical farms supply the wheat. The market demand and supply of wheat result in an equilibrium price of $2 per bushel of wheat. This graph represents one farmer's average variable cost (AVC) and marginal cost (MC) functions for producing wheat. It also shows the demand curve the farmer faces (D). Because it is horizontal, it is equal to the marginal revenue curve (MR). Recall that variable costs are the costs that change with the quantity of wheat that the farmer grows, costs such as fuel and fertilizer. If the farmer decides to grow no wheat this year, she can avoid these variable costs. For this farmer, variable costs are the only costs that she can avoid by choosing not to produce wheat this year. In the short run, she cannot avoid such costs as the two-year lease she agreed to with the owner of the farm land. Question 8 Not yet answered Points out of 1.00 Flag question If this farmer wants to maximize her profit (or minimize her loss), does make sense for her to produce a positive amount even though it means incurring variable costs? Select one: Qa. Yes Ob Mot enough information to determine the answer QOc. No Question 9 Not yet answered Points out of 1.00 Flag question Does it make sense for this farmer to stay in business in the short-run? Select one: Oa. Yes Ob. No . Not enough information to determine the