2. (20 pts} A rm producing children's tricvcles in a competitive market has the following short run cost structure. Cost data is in 5's. Use the data below to answer the following: a. The MC = at Q = 8. The AVC = at Q = 10. The ATC = at 0, = 4. b. Is it true that the data implies production is subject to the law of diminishing returns? Explain. c. Explain why when the AVC is increasing it is possible for the ATC to decrease or to increase. d. Now suppose that this is a perfectly competitive rm. Ifthe market price of a tricycle is 525, how many tricycles should this rm produce and sell. e. Compute the firm's prots. Compute Seller Surplus (Producer Surplus)