(Answered) Suppose the market supply function for natural gas is p 10

Economics

Suppose the market supply function for natural gas is P = 10 + 2Q and the market demand function of natural gas is P = 70 - Q, where P is the price of the natural gas per cubic feet and Q is the quantity of natural gas bought and sold.

1) What are the equilibrium price and quantity of natural gas in a competitive market?

2) Compute the consumer surplus and producer surplus.

Assume the government imposes a price ceiling at P = $40.

3) Find the consumer surplus and producer surplus associated with the resulting allocation.

4) Find total benefit and total cost in the allocation.

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