You decide to begin making cheese and part of your cheese production is purchasing a dairy license. As you begin to make cheese, you are just breaking even ( P= ATC). However, you receive a letter from the state saying that the Board of Health is doubling the annual fee for dairy licenses. a. In the short run, how does this fee increase affect your output level? Your profit? b. In the long run, how will this fee increase affect your output level? c. Suppose that instead of doubling the fee, the state requires you to treat your cheese with a special enzyme to prevent deadly bacterial growth - any cheese you sell must go through this treatment process. How does this regulation affect your production decision in both the short run and long run?