The following incomplete tables shows two competitive firms' various costs of producing output. a) Complete the table for FIRM A Q TC TVC TFC AC MC AVC 1 18 2 10 3 16 4 66 5 10 18 6 108 b) Complete the table for FIRM B Q TC TVC TFC AC MC AVC 1 20 10 2 18 3 15 4 72 5 30 6 144 c) Assume the market for this product is perfectly competitive and the current market price is $28. Determine the quantity produced by each firm and their economic profit/loss. Explain your answer. d) What will happen to this market in the long run and why? e) Now suppose that the market price falls to $16. Do both firms make economic profit? Explain why. f) If one or both of them makes an economic loss, would they shut down temporarily? g) Assume these two firms now are actually two factories of one corporation, and the corporation can operate either one or the other at a time. Using the two tables above, determine which factory should be in operation to produce up to a certain level of output. What is this level of output? h) Explain your answer to (g). ATTACH A SEPARATE COVER SHEET FOR QUESTION 01. 7 ECONOMICS EVERYDAY Question 02 – Theory Question (25 marks) – 400-600 Words Assume that the world market for wheat is perfectly competitive. a) Use a landscaped A4 page to demonstrate the world market for wheat in long run equilibrium conditions. The market for wheat is to be on the left, and a representative farm (firm) is to be on the right. b) Explain and discuss the long run conditions above. c) Illustrate on this diagram, the short run impact of a growing world population. d) Explain and discuss your answer to (c). e) Re-draw your diagram in (c). Illustrate on this new diagram what would happen in the long run. f) Explain and discuss your answer to (e). g) Explain and discuss what could prevent your answer to (f) from occurring and why. h) Explain and discuss what strategies a firm in this situation could adopt to retain what it is losing in (e) and (f).