(Answered) Question consider the global market for crude oil suppose

Economics

Question: Consider the global market for crude oil Suppose ther exists a single crude oil producer. This producer has a supply function for crude oil given by: P=0.25Q.

World demand for crude oil is given by: P=150-0.5Q.

Suppose a global govenment imposes a price ceiling on the market requiring the price for oil to be less than $70/barrel.

If the crude oil producer acts as price-taking firm, what is the firm's change in producer surplus as a result of the price ceiling (relative to no policy)?

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