HatCo, a firm that sells hats in a perfectly competitive market, has the following total cost function: C (Q) = 100 + 0.2Q + 0.05Q2 Questions 1.1. Write down an equation for the marginal cost curve. Explain what happens to marginal cost as production increases, and why marginal cost changes in this way. [3 mark] 1.2. Suppose the price of hats is $10. How many hats will HatCo produce? Explain how you found your answer. [2 marks] 1.3. Again, suppose the price of hats is $10. What will HatCo's profits be? [3 marks] 1.4. Based on your answer in 1.3, in the short-run, should HatCo stay open or shut-down? Explain your answer. [2 marks] Clearly label each of your answers in the text box below. Edit View Insert