Answer the following & state your reasoning.

(1) The assumption of a fixed number of firms is appropriate foranalysis of

A the short run but not the long run.

B the long run but not the short run.

C both the short run and the long run.

D neither the short run nor the long run.

(2) A purely competitive seller’s demand curve for itsproduct is perfectly horizontal because:

A there is no nonprice competition.

B the market is difficult to enter and exit.

C there are other sellers in the firm’s market.

D the firm has no control over the price it receives for itsproduct.

(3) If a competitive firm is selling 500 units of itsproduct at a price of $8 per unit and earning a positive profit,then

A its average revenue is greater than $8.

B its marginal revenue is less than $8.

C its total cost is less than $4,000.

D All of the above are correct.