The Florida orange market The Florida orange growers' cooperative in one of the largest citrus cooperatives of growers in the world. The entire cooperative is made up of more than 1,000 grower-members who own more than 50,000 acres of fine citrus groves in central Florida. The outlook for Florida orange grower looks to be optimistic this year with the U.S. Department of Agriculture projecting a 6% increase in market sales this year. The current market price of oranges is $2.15 per unit. Table 1 sets out the price, output, cost and revenue figures for an individual orange grower in the market. Output (units) TR ($) MR ($) TC ($) MC ($) 540 1880 1600 2830 2400 4550 3200 6370 a. (i) State two assumptions of perfect competition. [2] Using the information in table 1: (ii) Calculate the total revenue and marginal revenue at each level of output. [3] (ii) Calculate the marginal cost at each level of output. [2](iv) State the profit maximising output of the orange grower. [1] (v) Calculate the total profit of the orange grower at the profit maximising output. (2] (vi) Outline the type of profit the orange grower is making at the profit maximising level of output. (2] (vil) Outline what would happen to the market for oranges if producers in the market are earning this type of profit. (2] Fresh fruit is associated with positive Cost externalities. Diagram 1 benefit oranges shows the marginal S= MPC - MSC social cost and the $3.43 marginal social benefit in the market for oranges. $2-15 D- MPB MSA 2.24 3.56 Quantity oranges million units (vi) Define the term social benefit. [2] (vi) Using diagram 1, calculate the value of the potential welfare gain from oranges being produced at the socially efficient output. [2] (vii) Outline a positive externality associated with the consumption of oranges. [2] b. Using the data provided and your knowledge of economics, recommend a policy the US government could use to increase the consumption of healthy goods such as oranges. [10] Total [30]