5. A fim must pay a cost of entry of $1000. The firm is in the long run, and can decide to avoid paying this cost by producing 0 and exiting the market if it wants to. It can produce up to 5 units of...

Extracted text: 5. A fim must pay a cost of entry of $1000. The firm is in the long run, and can decide to avoid paying this cost by producing 0 and exiting the market if it wants to. It can produce up to 5 units of a good. The variable costs of producing units 1 to 5 are $40, $80, $120, $160, and $200, respectively. The market price of the good is $100. What should the firm do in this situation? Produce O units. O Produce 1 unit. Produce 2 units. O Produce 3 units. O Produce 4 units. Produce 5 units. 6. At the current market price, producing the quantity that maximizes profil would result in a loss of $4,000. The firm's fixed cost is $3,500. What should the fim do in the short run? Produce the quantity that maximizes profit, even though doing so would resuit in a ioss. O Shut down production since producing the quantity that maximizes profit would result in a loss thal is bigger than ils fixed cost. O Produce more than the quantity that maximizes profit since the profit-maximizing quantity would result in a loss. Produce less than the quantity that maximizes profit (but not shut down production fully) since the profit-maximizing quantity would result in a loss. 7. Demand in a market increases. Which of the following statements correctiy describes why and how the market will move to the new equilibrium? O The demand increase creates a shortage where the quantity dermanded is greater than the quantity supplied. In response, sellers increase the price they charge because they can do so and still find buyers for nach unit they want to producn and sell. They will keep raising price until quantity demanded equals quantity supplied. O The demand increase croates a surplus where the quantity supplied is greater than the quantity demandod. In response, sellers lower the price they chargo in order to attract more customers. They will keep cutting price until quanlity demanded equals quantity supplied. O The demand increase creates a surplus where the quant ty supplied is greater than the quantity demanded. In response, selers increase the price they charge because they can do so and still find buyers for each unit they want to produce and sell, They will keoep raising price until quantity demanded equals quantily supplied. O The demand increase creates a shortage where the quantity demanded is greater than the quantity supplied. In response, sei lers lower the price they charge in ordor to attract more customers. They will keep cutling price until quantity demanded equals quantity supplied.