Problem 3. The Los Angeles Airport Commission has decided to sell the right to opera coffee bar at the United Airlines Terminal. Starbucks and the Coffee Been and Tea Le interested in bidding for this exclusive right. For Starbucks the annual demand for co is: 05 = 500.000 220.000P5 {where P; is the price of a cup of Starbucks coffee expresse dollars} For Starbucks the annual long run total cost function is: TC: = $50,000 + 50.50; For The Coffee Bean and Tea Leaf the annual demand for coffee is: O; = 400,000 200.000P: {where P: is the price of a cup of Coffee Bean's coffee expr dollars} For The Coffee Bean and Tea Leaf the annual long run total cost function is: TC: = $50000 + $0.00c Assume that coffee is the only item being sold. A. Are there economies of scale for these coffee shops? Explain briey. B. 1What is the optimal price for each of the two operators? Show your work. C. 1I.I'I.ihat is the maximum annual amount that the Airport Commission can get for franchise? Show your work