In the short run, a perfectly competitive firm produces output using capital services (a fixed input) and labor services (a variable input). At its profit-maximizing level of output, the marginal product of labor is equal to the average product of labor. a. What is the relationship between this firm's average variable cost and its marginal cost? Explain. 0 Average variable cost is higher than marginal cost. 0 Average variable cost equals marginal cost. 0 Average variable cost is less than marginal cost. Instructions: Round your answer to the nearest whole number. b. If the firm has 10 units of capital and the rental price of each unit is $4/day, what will be the firm's profit? Should it remain open in the short run? $ (Click to select) v Should the firm remain open in the short run: 0 Yes, the rm would lose more by shutting down. 0 The firm is indifferent: the loss is the same either way