Magnificent Blooms is a florist in a monopolistically competitive industry. It is a successful operation, producing the quantity that minimizes its average total cost and making a profit. The owner also says that at this current level of production, MC is above MR. Illustrate the current situation of Magnificent Blooms in a diagram. Answer the following questions by illustrating with a diagram and explaining verbally.

a) In the short run, can Magnificent Blooms increase its profits? b) In the long run, can Magnificent Blooms increase its profits?