Patrick owns a caf in Melbourne, serving coffee and table-service meals. When the caf is full, it can seat 50 people, and Patrick hires 2 chefs and 4 waiting (serving) staff. His objective is to maximise profits from the caf. When the caf operates normally, he makes zero economic profit.

When COVID-19 restrictions are imposed, Patrick is only able to serve take away coffee. Patrick lays off all of his staff, and runs the caf by himself.

(a)Explain in words how the effects of the COVID-19 restrictions will affect Partick's ability to maximise profits. Draw and label diagrams that show Patrick's likely profits before and during the COVID-19 restrictions. (10 marks)

(b)Under what circumstances would Patrick continue to operate the caf, and under what curcumstances would he close the business? Draw two diagrams to support your explanation. (5 marks)

(c)Suppose COVID-19 restrictions are lifted, allowing Patrick to serve meals to 20 people. Draw a diagram and provide a written explanation of the likely effects on lifting restrictions on Patrick's level of output, costs, and profits. (5 marks)

(d)Suppose the Australian Government, in an attempt to encourage economic recovery from COVID-19, reduces the minimum wage. How might this affect the operation of Patrick's business? Discuss the arguments for AND against reducing the minimum wage to encourage economic recovery. (5 marks)