Consider a Popsicle stand that sells in a perfectly competitive market. The Popsicle stand has variable costs related to labor and materials of 2q^2-1/2q It has mortgage on the stand that costs $5. Assume the market is illiquid so that the stand could not sell its assets to another buyer. If it chooses to operate, it must pay $3 in electricity to keep the Popsicles frozen throughout the day.
(a) What are the stand's non-sunk ?xed costs? What are the stand's sunk ?xed costs?
(b) What is the supply curve for the Popsicle stand?
(c) How many Popsicles will the stand produce if the price is $7.50?