ch8.10

please show the work clearly.

10. The diagram below depicts the cost curves for a perfectly competitive jump drive producer that is currently operating at a loss. Quantity Goolsbee et al., Microeconomics, 3e, (9 2020 Worth Publishers Description The data of the graph are as follows: The Quantity is represented along the horizontal axis. The Price and cost in U 8 dollars per unit is represented along the vertical axis, and its values range from 0 to 20 dollars, at an interval of 4. A curve labeled M C intersects another two curves labeled A V C and A T C at 8 and 1 S on the vertical axis. a. Suppose the market price of jump drives is $7. In the graph, outline an area that represents this rm's losses if it produces where MR 2 MC b. If the rm in (a) instead shuts down and produces 0 units, it will lose only its xed costs. Outline an area that represents this rm's costs. c. Which area is larger: its losses from producing where MR 2 M C, or its losses from producing 0 units of output? What should the rm do? (1. Do your answers to (a), (b), and ((2) change if the price of jump drives is $1 1 rather than $7