Question 3 (3) Briey state the basic characteristics of pure competition. (5 marks) (b) Assume the following cost data are for a purely competitive producer: Quantity Average xed Average Average total Marginal cost costt) variable cost) cost($) ($) 0 1 6|] 45 $45 2 3|] 42.50 40 3 2|] 4U 35 4 15 3150 3D 5 12 37.00 35 15 Ill 3150 4D 7 8.57 38.57 45 8 7.50 40.63 55 9 6.67 43.33 65 II} 6.90 46.50 75 (i) Write the values of average total cost (from the table above) in your examination answer booklet. (5 marks) (ii) At a product price of $56, what will be the prot- maximizing or loss- minimizing output and total prot? (4 marks) (iii) If the product price drop to $41, will the rm produce in the short run? (4 marks) (iv) If the rm is facing a loss of $70 in the short run, what will the rm do? Briey explain with a diagram