C1. Answer this question according to Chapter 1). materials and lecture discussion. Assume the diagram provided below represents the marginal cost (M C ), the average variable cost (AVC), and the average total cost {ATE} in relation to the output (q) of a typical rm in a perfectly competitive industry where all rms have identical cost structure. (a) Explain how to calculate the protfloss of a typical rm in this industry when market price per unit is at $12, $8, $4, and $2. Mark the areas repmwting these protsosses in the diagram provided. (b) For each of the possible market prices given in pan (a), explain whether the rm should produce or shut down. Support your argument with numbers. (c) Suppose there are 100 identical firms in this industry, explain how to derive the short-run industry supply curve and plot it in a separate diagram. (Hint: When market price per unit is at $3, $4, $8, $10, and $12} 20 40 60 80 100 120 140