Frank is a young, prominent businessman. He is the founder and owner of Frank Rice Ltd, an Australian company that produces and exports rice to various countries across the world.

Assume the international market for rice exporting, in which Frank Rice Ltd operates, is a perfect competition market.

Question 1. Clearly explain how Frank sets the price and decides how much quantity of output to produce. How much economic profit does Frank tend to earn? Clearly explain.(1 + 1 + 1 = 3 marks)

Question2.Draw an appropriate firm diagram that represents the business of Frank Rice Ltd. Make sure to clearly and adequately label your diagram.(3 marks)

Question 3. Frank holds a firm belief that his rice is superior to that offered by other competitors in the market. As a result, he has been looking to raise the price of his rice in order to reflect its superiority.Clearly explain what will happen to the business of Frank Rice Ltd if Frank follows through to raise the price.(2 marks)

Question4.In late March and early April 2020, the governments in various rice exporting countries such as Cambodia, India and Vietnam moved to impose an export ban on rice. This was prompted by food security concerns caused by the COVID-19 pandemic. As long as this ban was in effect, rice producers in those countries were prohibited from exporting rice overseas.Draw appropriate diagram(s) to illustrate the effect of this export ban on the international market for rice exporting. Make sure to clearly and adequately label your diagram.(2 marks)

Question5.Explain clearly how the export ban mentioned in Question 4 would affect the business of Frank Rice Ltd.(3 marks)

Question 6.Draw appropriate diagram(s) to illustrate the effect of the export ban on the business of Frank Rice Ltd.(3 marks)

Question 7.The rice export ban as mentioned in Question 4 was eventually lifted in mid-April 2020. Rice producers from Cambodia, India and Vietnam returned to trade in the international rice market as usual. Clearly explain in words how the removal of this ban would affect the business of Frank Rice Ltd.(2 marks)

Question 8.Since his business operates in a perfect competition market, Frank earns zero economic profit most of the time. If Frank is determined to earn some economic profit, what should he do? Clearly explain.(2 marks)