Around Australia in 2022, the price of lettuce increased dramatically from around $2-$3 to as much as $12 per lettuce

1. Do some research into the events of 2022 to examine what might have caused such price increase. Why can we argue the market for lettuce is perfectly competitive. (3 marks)

1. Use a model of the industry and a representative firm in the short run to explain the impact of the events in a) on the market and on individual firms in the market. What happened to consumer and producer surplus in the short run as a result? (3 marks)

1. The price of lettuce has returned to relatively usual levels. Use a model of the industry and a representative firm in the long run to explain the current equilibrium. (2 marks)

Explain why the long run is important in studying the market for agricultural products like lettuce.