Remedy Pty Ltd sells nutritional supplements in a market characterised by a high level of competition and differentiated by highly substitutable products. Refer to Figure 3, and answer the following:

a. Identify and explain the most likely long-run operating position for this firm, including all relevant cost curves and operating costs, revenue and profit or loss. [5 marks]

b. Suppose the government decides to impose laws to standardise all supplements, effectively removing the ability to sell differentiated products. What would this mean for a producer like Remedy Pty Ltd? [2 marks]

c. Suppose the government instead decided to regulate the market by providing an exclusive licence to produce supplements to one firm only. What would this mean for Remedy Pty Ltd, if they are able to secure this licence? [3 marks]

Figure 3 Ca Cs