Economics Bread Company expanded its product line. The company introduced a new Naan line called Econ Naan. The new Naan line required a special oven which can only be used for new Naan line. It costs 3,000,000 but can be resold for parts for $1,000,000. To train the manufacturing division on how to make Econ Naan, there was a one-time employee training fee of $500,000. The new Naan division also pays a graphic designer a 50,000-dollar one-time fee to develop the Naan logo design. Per naan labor costs are 60 cents. Per naan material cost thirty-five cents. Two managersare paid an annual salary of $75,000 eachas management consultantsfor the entire business (all product lines). The annual lease on the production building is $1,000,000 (all products are produced at the same building).You are hired as a consultant to answer the following questions.(10 points total)

a. Which costs, if any, are sunk costs? (3 points)

b. If the Econ Naan division is producing 2,000,000 units of Naan, at what price per Naan should it shutdown naan production in the short-run (short run time horizon)? (4 points)

c. Assume the decision to expand the product line was made and executed last year. Going forward, which costs are avoidable over the long run (and would be relevant in a long-run breakeven analysis)?(3 points)