Please provide a detailed response and show calculations.

a) Suppose the fixed cost of a Christmas trees business is $7,000 and sunk. The variable cost for each tree is $20. According to the forecast, the market price for Christmas trees is $25 each and the owner could sell 1000 trees at most each year. What will you advise the owner to do? Explain your answer.

b) Suppose the estimated fixed cost of a Christmas trees business is $7,000 and not sunk. The estimated variable cost for each tree is $20. According to the forecast, the market price for Christmas trees is $25 each and the owner could sell 1000 trees at most each year. What will you advise the owner to do? Explain your answer.