$1.$ Consider a firm that produces dietary supplements. It has plants in Indiana and in California. Consider the following information:

$*$Note that this includes all supplements that the firm produces

Plant Size A

Indiana Plant California

Quantity of workers Total Supplements Quantity of Workers Total Supplements

$0000$

$15000110000$

$212000221000$

$320000331000$

$427000438000$

$532000544000$

$636000646000$

$738000746000$

Plant Size B

Indiana Plant California

Quantity of workers Total Supplements Quantity of Workers Total Supplements

$0000$

$110000111000$

$224000245000$

$340000365000$

$454000476000$

$564000594000$

$6720006100000$

$776000790000$

a$.$ Suppose that the CEO of the company is really frustrated with the high wages in California and wants to shut down the plant. However, the company needs the same level of production as in letter c $($for example, if total production was $80,000,$ the company still needs to produce $80,000).$ Should it shut down the plant in California and move all the workers to the plant in Indiana? Why or why not? Note that we are still in the short run and therefore constrained to be in plant size A$.$

B$.$ Again, assume the company still needs the same level of production as in letter c$.$ The CEO is still frustrated by the high wages in California and wants to concentrate all production in Indiana. If it moves to Plant Size B$,$ can it do this? Why or why not?

c$.$ Is letter e a short$-$run question or a long$-$run question? How do you know?