Fixed Question 4 (40 marks) The following table describes the production possibilities of a chocolate factory that manufactures luxury chocolates. The firm's capital input is fixed in the short run and costs 15,000 per week. Each worker is paid 1,500 per day and chocolates sell for 67.50 per box No. of Output Variable Total Marginal Marginal Average workers per day Cost (FC) Cost (VC) Cost (TC) Product Cost Total (MP) (MC) Cost (ATC) 0 0 1 40 2 1000 3 1300 4 1500 5 1600 6 1650 (a) 24 marks Complete the calculations for FC, VC, TC, MP, MC and ATC. (b) 5 marks What pattern do you see in marginal product? How might you explain it? (c) 6 marks Using the marginal rule, determine the firm's profit maximising level of output. Explain your answer. What is the firm's profit at this output level? (d) 5 marks illustrate and explain the relationship between average total cost and marginal cost. Question 5 (40 marks) (a) 8 marks Distinguish between a perfectly competitive market structure and a monopoly outlining the main characteristics of each type of market structure, (b) 16 marks Competitive firms may decide to shut down in the long run or to exit the industry in the short run. True or False? Illustrate and explain your answer. (c) 16marks Draw the demand, marginal revenue and marginal cost curves for a monopolist. Show the profit-maximising level of output, the profit-maximising price and the deadweight loss. Explain the shape of the demand curve and the marginal revenue curve