A) Suppose that Quinoa is produced with labor (L) and land (K). The markets for labor, land, and quinoa are all perfectly competitive, but the supply of labor and land are both upward sloping (i.e. not perfectly elastic). As a result, the long-run industry supply curve for quinoa is upward sloping.

i) Is producer surplus positive or zero in the long-run?

ii) If all firms producing quinoa have identical production technology, do quinoa producers earn a profit in the long-run?

iii) In the long-run, where does producer surplus go in the quinoa market?

B) Suppose the market for shoelaces is perfectly competitive and all firms have identical production technology. If short-run profits for shoelace manufacturers are positive, what will happen to the supply of shoelaces in the long-run? The price of shoelaces?