7. Cush wants to open a bakery called Flour Power. She has her choice of three different floor sizes, 200 square feet, 500 square feet or 1,000 square feet. The monthly rent (r) will be $1 a square foot. Cush estimates that if she has F square feet of floor space and sells y pies a month, her variable costs will be TVC =q2/F per month. Her marginal costs are therefore (I used calculus to get this), MC=2q/F. If she has 200 square feet of floor space a. Write an equation for her marginal costs (hint, substitute in for the fixed input, floor space, F): b. Does Cush experience diminishing returns in the short run? How do you know? c. Write her average total cost (ATC) function in terms of q. Hint, first write an equation for her total costs that includes fixed and variable costs. If she has 500 square feet of floor space a. Write an equation for her marginal costs b. Write her ATC function in terms of q: If she has 1000 square feet of floor space a. Write an equation for her marginal costs: b. Write her ATC function in terms of q: Use blue ink to show Cush's ATCF=200 and her MCF=200 curves if she has 200 square feet. Use red ink to show her ATCF=500 and her MCF=500 curve if she has 500 square feet. Use black ink to show her ATCF=1000 and her MC1000 if she has 1000 square feet. Label the average cost curves AC and the marginal cost curves MC. Use yellow marker to show Cush's long-run average cost curve. Label it LRAC. 7. Cush wants to open a bakery called Flour Power. She has her choice of three different floor sizes, 200 square feet, 500 square feet or 1,000 square feet. The monthly rent (r) will be $1 a square foot. Cush estimates that if she has F square feet of floor space and sells y pies a month, her variable costs will be TVC =q2/F per month. Her marginal costs are therefore (I used calculus to get this), MC=2q/F. If she has 200 square feet of floor space a. Write an equation for her marginal costs (hint, substitute in for the fixed input, floor space, F): b. Does Cush experience diminishing returns in the short run? How do you know? c. Write her average total cost (ATC) function in terms of q. Hint, first write an equation for her total costs that includes fixed and variable costs. If she has 500 square feet of floor space a. Write an equation for her marginal costs b. Write her ATC function in terms of q: If she has 1000 square feet of floor space a. Write an equation for her marginal costs: b. Write her ATC function in terms of q: Use blue ink to show Cush's ATCF=200 and her MCF=200 curves if she has 200 square feet. Use red ink to show her ATCF=500 and her MCF=500 curve if she has 500 square feet. Use black ink to show her ATCF=1000 and her MC1000 if she has 1000 square feet. Label the average cost curves AC and the marginal cost curves MC. Use yellow marker to show Cush's long-run average cost curve. Label it LRAC