(Solved): 1) Suppose That The Market Demand Curve For Petrol In New York Is Given By P = 10 – Q, And The Mar...

1) Suppose that the market demand curve for petrol in New York is given by P = 10 – Q, and the market supply curve is given by P = 0.25Q, where Q represents millions of litres. Further, suppose that the exhaust from cars burning petrol produces an additional cost for New York residents valued at $1.25 per litre.

Without government intervention, what will be the deadweight loss associated with the market equilibrium?

2) Suppose that the market demand curve for petrol in New Yorkis given by P = 10 – Q, and the market supply curve is given by P = 0.25Q, where Q represents millions of litres. Further, suppose that the exhaust from cars burning petrol produces an additional cost for New Yorkresidents valued at $1.25 per litre.

Without government intervention, what will be the deadweight loss associated with the market equilibrium?