6. Deriving the short-run supply curve The following graph plots the marginal cost (MC) curve, average total cost (ATC) curve, and average variable cost (AVC) curve for a firm operating in the competitive market for snapback hats. 100 90 80 70 60 ATC COSTS (Dollars) 50 40 20 AVC 10 MC-O 5 10 15 25 30 35 40 45 50 QUANTITY (Thousands of snapbacks)For every price level given in the following table, use the graph to determine the profit-maximizing quantity of snapbacks for the firm. Further, select whether the firm will choose to produce, shut down, or be indifferent between the two in the short run. (Assume that when price exactly equals average variable cost, the firm is indifferent between producing zero snapbacks and the profit-maximizing quantity of snapbacks.) Lastly, determine whether the firm will earn a profit, incur a loss, or break even at each price. Price Quantity (Dollars per snapback) (Snapbacks) Produce or Shut Down? Profit or Loss? 10 20 32 40 50 60 On the following graph, use the orange points (square symbol) to plot points along the portion of the firm's short-run supply curve that corresponds to prices where there is positive output. (Note: For the graphing tool to grade correctly, you must plot the points in order from left to right, starting with the point closest to the origin. You are given more points to plot than you need.)On the following graph, use the orange points (square symbol) to plot points along the portion of the firm's short-run supply curve that corresponds to prices where there is positive output. (Note: For the graphing tool to grade correctly, you must plot the points in order from left to right, starting with the point closest to the origin. You are given more points to plot than you need.) 100 90 Firm's Short-Run Supply 80 70 60 PRICE (Dollars per snapback) 50 40 30 20 10 5 10 15 20 25 30 35 40 45 50 QUANTITY (Thousands of snapbacks) Suppose there are 10 firms in this industry, each of which has the cost curves previously shown.On the following graph, use the orange points (square symbol) to plot points along the portion of the industry's short-run supply curve that corresponds to prices where there is positive output. (Note: For the graphing tool to grade correctly, you must plot these points in order from left to right, starting with the point closest to the origin. You are given more points to plot than you need.) Next, place the black point (plus symbol) on the graph to indicate the short-run equilibrium price and quantity in this market. Note: Dashed drop lines will automatically extend to both axes. 100 90 Industry's Short-Run Supply Demand Equilibrium 30 50 PRICE (Dollars per snapback) 40 30 20 10 0 0 50 100 150 200 250 300 350 400 450 500 QUANTITY (Thousands of snapbacks) At the current short-run market price, firms will in the short run. In the long run