1. You produce widgets. Currently you produce 4 widgets at a total cost of $40.(a) What is your average total cost?(b) Suppose you could produce one more (the fth) widget at a marginal cost of $5. If you do produce that fth widget what will your average total cost be? Has your average total cost increased or decreased? Why?(c) Suppose instead that you could produce one more (the fth) widget at a marginal cost of $20. If you do produce that fth widget what will your average total cost be? Has your average total cost increased or decreased relative to part (a)? Why?2. Explain whether each of the following statements is true or false and explain your reasoning.(a) At any given level of production the short-run average total cost can never be less than the long-run average total cost.(b) At any given level of production the short-run average variable cost can never be less than the long-run average total cost.