A dairy farmer sells milk at a price of $2 per bottle at possible outputs of 1000, 2000, 3000 or 4000 liters per week.

(a) Identify the type of market the dairy farm is operating in. Explain your answer.

(b) With separate diagrams, explain the conditions for firms in this type of market to make economic profit, no profit and loss.

(c) With a diagram, explain what would happen to the profitability of farms in this type of market in the long run.