Explain Why Each Of The Following Statements Is False Be Thorough Yet Concise In

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 outputincreases, the distance between average total cost and average variable cost increases.

2. When perfectly competitive firms make aprofit, it encourages other firms to enter. Over thelong-run, this entry causes the market demand curve to shiftright, which increases marginal revenue for each firm. This entry continues until each firm is earning zero profit.

3. To maximizeprofit, a monopolist will produce and sell a quantity where MR= MC and then charge a price equal to MR.

Running head: COST FUNCTION 1 Cost FunctionStudent’s NameInstitution COST FUNCTION 2Question 1 As output increases the AVC decreases then increases because at first, the MC is less thanAVC…