At a given price level, an increase in expected profits and business confidence will shift the aggregate demand curve:

Suppose a price ceiling is set above the equilibrium price. Now suppose that policy makers decide to raise the price ceiling. This increase in the price ceiling will cause which of the following to occur?

A) The surplus in the market will increase. B) The surplus in the market will decrease. C) The shortage in the market will increase. D) none of the above

Answer the following statement(s) true (T) or false (F)

1. A firm earns a positive economic profit when the market price exceeds its marginal cost. 2. As long as profits remain positive, a firm will want to increase the quantity produced. 3. Only variable costs are relevant to a firm's decision to shut down. 4. When a firm has chosen to shutdown it has exited the industry. 5. A competitive firm will exit the industry in the long run if the price of its product falls below its average cost.