Econ Question!

In A, the price level of a price taker's market is determined by market demand and market supply, the latter of which is a horizontal summation of individual seller's supply curve (MC curve above minimum of A(V)C). Then each individual seller will take that market price and determine freely by himself what quantity to sell. As a walth-maximizer, the output level where MR = MC above A(V)C is taken.

In B, abundant wheat means each seller can produce more with the same cost. MC of each seller moves to the right. So the market supply (which is horizontal summation of individual seller's supply) will also shift to the right. So the price level, determined by market demand and increased market supply, falls. Then each individual seller takes the decreased price, and given no entry of new sellers, the overall effect of output of each seller (decreased MC which raises output conteracted by falling price and hence falling MR which lowers output) is still INCREASE. You will understand more if you draw a diagram according to this logic.

To gain more marks, you may argue that if the assumption of "no entry of new seller" does not hold, the output taken by individual seller can increase, remain unchanged or decrease depending on the cost structure of each seller and the new entrants.

Not to help you do the home work, but give you a guideline.
A is all about perfect competition, consider what a firm may do in this market you get the answer.
B is about supply and demand, whereby demand is implied to be have no change from last year, but supply is increased. You may/should also discuss if demand also increase what would happened, if you want higher mark.