3. (a) Define and explain the equation for gains in technical efficiency AT with respect to asset specificity. Plot AT in a properly-labeled graph and explain its shape. Analyze how AT would be affected by production scale. (b ) Define and explain the equation for gains in agency efficiency AA with respect to asset specificity. Plot AA in a separate properly-labeled graph and explain its shape. Analyze how AA would be affected by production scale. (c) Use results from parts (a) and (b) along with a separate properly-labeled graph to help you explain the combined cost saving AC and the optimal decision on vertical integration with respect to asset specificity. Use another properly-labeled graph to help you explain how changes in production scale affect the vertical integration decision. Explanation: (a) 7 marks; (b) 7 marks; and (c) 10 marks