Please provide a short explaination of why the problem is true or false.
Problem 1: A firm maximizes its profit at the break even point. Break even point is the point where marginal revenue equals zero. True or false, explain.
Problem 2: Firms advertise in order to change price elasticity of demand for their products. However, the higher elasticity would mean a decrease in the marginal revenues. True or false, explain.
Problem 3: Demand estimation is made difficult by the fact that customer self-interest often militates against accuracy of demand information gained through consumer interviews. True or false, explain.
Problem 4: Production function specifies the maximum output that can be produced given varying degrees of technological progress. True or false, explain.
Problem 5: When a firm operates at increasing returns to scale, long run average cost is increasing. True or false, explain.