Context: Poultry industry

The Poultry Processing industry in Australia has encountered a blend of operational circumstances in recent years. Despite a rise in poultry consumption, intense competition among major supermarkets has curbed the growth of poultry prices, impacting both industry revenue and profitability. Fluctuations in domestic wheat feed prices have further exacerbated cost volatility, compelling processors to consolidate and restructure in order to enhance productivity and profitability. Over the five-year period leading up to 2023-24, revenue within the Poultry Processing industry is projected to experience a marginal annual growth rate of 0.1%, reaching a total of $8.8 billion. However, a decline of 3.7% in revenue is anticipated for 2023-24, largely influenced by shifts in poultry prices. These challenges have prompted processors to streamline their operations and actively pursue avenues to maintain their competitiveness within the market.

You are appointed as a Senior Estimating & Pricing Specialist for the poultry sector in Australia, and your task is to develop an analysis that will be reported to the Head of the Analytical Pricing Unit.

1. Is the poultry meat industry better off operating in a monopolistically competitive market rather than a perfectly competitive one?Support your discussion and argument(s) using relevant microeconomic theory/theories in a graph(s) and explain your arguments. In your response, discuss monopolistic competition considering both short-run and long-run economic profit.

1. Illustrate how advertising or promotional campaigns, such as the use of a marque and advertising indicating a poultry is '100% organic', can impact a firm's costs and profits if they are successful.Support your discussion and argument(s) using relevant microeconomic theory/theories in a graph(s) and explain your arguments.

1. Explain, usingmicroeconomic theory/theories, and illustratein a graph(s), the likely short-run and long-run effects of the unfavourable market conditions caused by increased in poultry feed on a firm's profit and output.

1. Price elasticity of demand provides information about consumers' likely responses to a price change, which is particularly important when setting maximum prices for essential goods and services. Using the data provided below, calculate the price elasticity of demand for chicken based on the mid-point method. Present your calculations in a table.Explain your result. Research possible reasons for your estimated price elasticity of demand and include these in your analysis.

Year	Price (per kg)	Quantity Demanded (Tonnes '000)
2008	11	1210
2009	11.5	1010
2010	11	1255
2011	11.5	1095
2012	12	1251
2013	12.5	1020
2014	11.5	1475
2015	11	1805

1. Assume that one major poultry producer is merging with another large producer to increase market share. Explain the impact on this market equilibrium and price, consumer surplus and producer surplus.

1. The table below sets out the market demand schedule and total cost schedule for your company's poultry production. Construct the company's total revenue, marginal revenue, and marginal cost schedule. Calculate the firm's economic profit. Graphically illustrate these and mark the profit-maximising quantity and price. Using your graph, calculate the consumer surplus and explain your results.

Price (dollars per kg)	Quantity demanded (Kg per week)	Total Costs (dollars per week)
13	0	0
12	100	1000
11	200	1800
10	300	2100
9	400	2700
8	500	3500

Your task is to develop a short report followed by a video recording addressing the following points: