Evaluate each of the following statements. a. A profit-maximizing firm in a perfectly competitive industry should select the output level at which the difference between the market price and marginal cost is greatest This statement is false. The firm should select the output where market price is equal to marginal cost. b. An increase in fi false. The firm should select the output where total revenue is maximized. true. This is how a firm maximizes profit in a perfectly competitive industry. This statement is false. The firm should select the output where marginal cost is lowest. in the short run. b. An increase in fixed cost lowers the profit-maximizing quantity of output produced in the short run This statement is in false. This change increases the profit-maximizing output true. Firms take into account changes in fixed cost when maximizing profit false. Changes in fixed cost only alter long-run decisions, not profit-maximizing output false. This change does not impact price nor marginal cost, thus it does not impact the profit-maximizing output