B. Suppose that the demand curve for gasoline in both years is given by p 5 A 2 ax while the pre-crisis supply curve is given by p 5 B 1 bx.

a. Derive the pre-crisis equilibrium price p*.

b. Suppose the crises in both years cause the supply curve to change to p 5 C 1 bx where C . B. Derive the new equilibrium price pr that emerged in 2008.

c. Now consider 1973, when the government imposed a price ceiling p between p* and pr. Derive the real price ps paid by consumers (taking into account the effort cost of waiting in line).

d. Can you show that ps . pr?