Explain why each of the following statements is false. Be
thorough yet concise in your answer.
1. Consider a graph of typical cost curves for a firm. As
output increases, the distance between average total cost and
average variable cost increases.
2. When perfectly competitive firms make a profit, it
encourages other firms to enter. Over the long-run, this entry
causes the market demand curve to shift right, which increases
marginal revenue for each firm. This entry continues until each...