Question 4 i. Explain two ways how policymakers respond to the inefficiencies of monopolists. [6 marks] ii. Describe the difference between average revenue and marginal revenue. Why are both of these revenue measures important to a profit-maximizing firm? [4 marks] iii. Explain how a firm in a competitive market identifies the profit-maximizing level of production. When should the firm raise production, and when should the firm lower production? [5 marks] iv. Use a graph to demonstrate the circumstances that would prevail in a competitive market where firms are earning economic profits. Can this scenario be maintained in the long run? Carefully explain your answer. [5 marks] V. Use a graph to demonstrate the circumstances that would prevail in a perfectly competitive market where firms are experiencing economic losses. Using your graph, determine whether this firm will shut down in the short run, or choose to remain in the market. [5 marks]