Microeconomic theory

2. (30 points) Cost Curves Consider the following cost function: 1 : 20 7 C(11) + 279! 2 + qu + Mg (a) (15 points) Find the price range for which the rm should shutdown. (b) (10 points) The following diagram shows the AVG, ATC and M C curves. Identify the price range where the rm makes a negative prots but should not shutdown in the short-run.| $ $12.12 - $11 - $10.8 - (c) (5 points) If the shortrun equilibrium price is in the price range that you found in part (b). Do you expect rms to enter or exit the market in the long-run? (explain)