3. (15 points) The cost of producing a lowquality cup is $10. If the producer uses high quality row material it cost the rm $14 to produce a highquality cup. The both cups look like completely the same and there is no way for Consumers to distinguish between two kind of cups when they make their purchases. There are four rms in the mark producing cups. Consumers value cups at their cost of production and are risk neutral. (a) Will any of the four rms be able to produce highquality cups with out making losses? Explain. (7 pts) (b) What happens if consumers are willing to pa).r $34 for highquality cups? (8 pts)