The diagrams below show short-run cost curves for four perfectly competitive firms. Assume that each firm faces a market price of p0.
a. Which firms could earn positive profits at some level of output?

(i) Firm 1

(ii) Firm 2

(iii) Firm 3

(iv) Firm 4
b. Which firms would be incurring losses at their profit-maximizing level of output, but will continue producing in the short run?
c. Which firms will choose not to produce at price p0?

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