Write 2-3 sentencing explaining why the sentence is correct.

1. To maximize profit a firm would want to increase production if marginal revenue is greater than marginal cost.

2. Land, labor and capital are all examples of factors of production. 3. The reason why the short run ATC curve is dimishing marginal product, but the long run ATC is U-shaped because of economics of scale. this is because in the long run there are no fixed cost. 4. A firm would want to shut down in the long run only if the price is less than the average total cost but in the short run a firm would want to shut down only if the price is less than the average variable cost. 5. When graphing MC, AFC, AVC, and ATC on one graph, which curve is able to be above Marginal cost.

6. If firms in a competitive market are earning a profit we would expect the numbers of sellers in the market to increase.