Question 1: 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 government imposes a price ceiling on the market requiring the price for oil to be less than $70/barrel.
e) If the crude oil producer acts as a monopolist, what is the change in consumer surplus as a result of the price ceiling?