2. Based on the perfect competition model as depicted in the following diagrams, explain the short-run and long-run economic adjustments occurring in the following two markets. Please distinguish the market diagram and individual firm's diagram. Initial market demand and supply curves and firm's marginal revenue curve are denoted as Do, So and MR, respectively. (a) Explain how the growing world population is influencing the world market for wheat and a representative individual wheat farmer. (25 points) MC ATC Price (dollars per bushel of wheat) lle Price and cost (dollars per bushel of wheat) MRO 5 1t] 15 20 25 30 35 Quantity (billions of bushels per year) 50 100 150 200 250 300 350 400 Quantity (thousands of bushels per year) (b) Explain how the nappy service market has been affected by the decrease in the Australian birth rate and the development of disposable nappies.(ssume nappies market is perfectly competitive.) (25 points) 2.00 MCATC. Price (dollars per nappy) Price and cost dollars per nappy) 25 5 10 10 15 20 25 30 35 Quantity (millions of nappies per year) 20 30 4D 50 60 TU 30 Quantity (thousands of nappies per year)