\fQUESTION 2 (10 MARKS) 1. An apple grower's orchard provides nectar to a neighbour's bees, while the beekeeper's bees help the apple grower by pollinating his apple blossoms. Use the figures below to explain why this situation of dual positive externalities might lead to an under allocation of resources to both apple growing and beekeeping. Note that "P" in MPC and MPB are costs and benefits that DO NOT include any possible or negative externalities. MPC Price ($) a N WA UI MPB Apples MPC Price ($) A UI a N w MPB Honey NOV W N P 14 . ... ull T MacBook Airb) (5 marks) Is the perfectly competitive firm earning an economic profit or loss in the short-run? What is the profit or loss? Show your calculations below: Profit or loss = c) (2 marks) In the long run, what is the economic profit of the competitive firm? Profit or loss = d) (2 marks) What will the market equilibrium price and quantity be in the long run? P = O= e) (3 marks) What quantity will the firm produce in the long-run? Q*= f) (2 marks) How many firms will exist in the long-run? Explain. No. of firms g (2 marks) Is the representative perfectly competitive firm achieving efficiency? Explain your answer below: NOV ... W N P 14 .... Oud TE MacBook Air 80 DII DD F3 F4 F5 F6 F7 F8 F9