Indicate whether each of the following statements is true or false and why.

A. In long-run equilibrium, every firm in a perfectly competitive industry earns an economic profit.

B. Pure competition exists in a market when firms are price makers as opposed to price takers.

C. A natural monopoly results when the profit-maximizing output level occurs at a point where long-run average costs are decreasing.

D. Downward-sloping industry demand curves characterize monopoly markets; horizontal demand curves characterize perfectly competitive markets.

E. A decrease in the price elasticity of demand would follow an increase in monopoly power.