1. (30 points) Answer the following questions. Please be rigorous in building arguments. (a) Describe the profit maximization problem of a competitive firm in words. [l (b) Describe the cost minimization problem of a competitive firm in words (describe both stages) El (c) Explain why a competitive firm's supply curve 1) coincides with the marginal cost curve, 2) it is not downward sloping, and 3) it is above the firm's average variable cost curve. (d) Explain why the optimality condition of a monopoly is mr(y*) = mc(y*) (i.e., the marginal revenue is equal to the marginal cost at the optimal level of production). (e) Explain why a competitive firm produces an output level, in which the average cost equals the marginal cost in the long run. [ (f) Provide brief descriptions in words for the following oligopoly models: 1) Stackelberg, 2) Cournot, and 3) Bertrand models