3. The hot dog stand industry in Frankland is monopolistically competitive. A typical Stand pro and sells 10,000 h0t dogs during the summer season. For that Stand, the price per hor dog is $3.00, the average total cost is $1.00 at the current producrion level, and the marginal c05t is $0.50 at the current production level. a. Draw a correctly labeled graph of this typical hot dog stand under current market conditions, labeling the equilibrium quantity and the equilibrium price with the numbers provided. b. Calculate the economic prot or loss for the typical hor dog stand. c. On your graph From part a, shade in the area of the prot or loss. Now assume that the government imposes a $20,000 lump-sum license fee For the summer season. d. What happens to the price and quantity for the typical hat dog stand as a result of the license fee? Explain. e. Show the impact of the license fee on the graph from part a and provide a clear label for anything that changed. f. What will happen to the number of hot dog Stands over the course of the season? Explain. (1 0 points) duces 4. The following diagram shows the pricing strategies and payoffs for the two bubble gum firms in town. Long Lasting Flavor Co. Set high prices Set low prices Big Set high prices $400, $250 Bubble $200, $350 Co. Set low prices $500, $100 $150, $50 a. Does Big Bubble Co. have a dominant strategy? Explain. b. Does Long Lasting Flavor Co. have a dominant strategy? Explain. c. Does this situation have any Nash equilibria? Explain. (6 points)