Consider the market for fast food pizzas to be effectively perfectly competitive. In the early 2000's most companies had the same cost structures. However, Domino's Pizza invested significantly in its information technology systems. One of the outcomes of this has been to allow it to sell pizzas for less today than its competitors. Given Domino's size it has been able to greatly increase supply of pizzas to the market.

1. If the current market price of pizzas in Toowoomba is $7 per pizza and the local Domino's franchise has an average total cost (which includes opportunity cost) of $3.50 per pizza, then it is likely that over time the market prices of pizzas will . Type D for Decrease, I for Increase or U for Unsure.
2. If a Domino's franchise in Toowoomba is currently selling 1,200 pizzas per week, what is their weekly economic profit if the current market price is $7 per pizza? $. Answer to the nearest whole number (with no decimal places).
3. If the Toowoomba City Council imposed a yearly fast food tax on every fast food outlet in Toowoomba of $1.50 per pizza, would the marginal cost of pizzas increase? . Type Y for Yes or N for No.