2. (for group presentation) Suppose that the figure below shows the (short-run) marginal and average cost curves for the production of Mazda CX 5 model, with costs on the vertical axis and the number of cars on the horizontal axis. 7rC MC Cost ? Quantity -a. Think about the fixed costs and variable costs facing Mazda Motor Corporation, explain the shape of the MC and AC curves. b. Assume that the long-run AC curve for Mazda Corp has a similar shape as the one in the above figure, can the car company exploit economies of scale? c. Now think about inflation, in particular rising input prices (labour cost, borrowing cost, materials such as semiconductor chips, etc), discuss Mazda's ability to increase the car price