Question 2 [5 marks] Explain what would happen to the \"agency efficiency\" line as the scale of transactions decreases. A clearly labelled diagram should be used to answer the question. Question 3 [5 marks] Explain in detail the two mistakes (fallacies) that commonly appear during the SSNIP (Small but Signicant Nontransitory Increase in Price) test application. Question 4 [5 marks] The theory of the firm assumes that the rm's ultimate objective is to make as large a prot as possible. Ideally, for any given amount of output the firm might want to sell, it would prefer to set price as high as it could, however, the firm's demand curve limits what the price could be. How, then, is the optimal output determined? Answer the question using the concepts of marginal revenue (MR) and marginal cost (MC)