The management of a firm wants to introduce a new product. The product will sell for $4 a unit and can be produced by either of 2 scales of operation. In the first, total costs are TC = $3,000 + $2.8Q. a) $2,500 In the second scale of operation, total cost are TC = $5,000 + $2.4Q a) $3,125 b) a. What is the break-even level of output for each scale of operation? b. What will be the firm's profits for each scale of operation if sales reach 5,000 units? c. One-half of the fixed costs are noncash (depreciation). All other expenses are for cash d. The anticipated levels of sales are the following: Year Unit Sales 1 4,000 2 5,000 3 6,000 4 7,000 If management selects the scale of production with higher fixed costs, what can it expect in years 1 and 2? On what grounds can management justify selecting this scale of operation? If sales reach only 5,000 a year, what the correct scale of operation chosen?