7. The Electric Company owns three power generators, each of which is painted a different color. During any hour, the red generator can produce up to 500 kilowatt hours (kWh) at a cost of $1.00/kWh in raw materials. The blue generator can produce up to 200 kWh at a cost of $3.00/kWh in raw materials. The green generator can produce up to 100 kWh at a cost of $2.00/kWh in raw materials. Regardless of how much electricity is produced, the firm must pay its $100 to its workers according to a union contract. The machines are worth $100,000; if the firm did not own these machines, the money invested in the machines would be invested in bonds yielding 68c an hour. a. Graph this firm's marginal cost curve. b. In the short run, what are this firm's fixed costs? What are this firm's variable costs? c. In the long run, what costs are fixed? 8. Suppose a firm has fixed costs of $30 per day and a marginal cost of production that starts at $1.00 for the first unit of output and increases by $1.00 for each unit produced (so the marginal cost of the 9th unit, for example, would be $9.00). There are many identical firms in this firm's perfectly competitive industry, and the market demand for this firm's product is equal to 40,000- 4,000*P. To begin, the short run market equilibrium price is $2. There are no economies of scale or externalities in this industry. Assume the firm must always produce a whole number of units of output FC MC VC TC AVC ATC Q 0 1 2 4 5 6 7 8 9 10 a. What is the marginal cost of the tenth unit of output? b. What is the total cost of producing ten units of output? c. What is the average variable cost of producing ten units of output? d. What is the average fixed cost of producing ten units of output? e. What is the average total cost of producing ten units of output