1. Demand for concert tickets to see the world-renowned musician, Jazzoleon, is given by P = 500 - 5Q. Supply of tickets is given by P = 100 + 5Q. Jazzoleon's fans are very loyal and love to sing along during his performances. Each fan that sings creates a negative externality (ie, noise pollution) of 100 on Roger and Zo, nearby residents who just want a quiet existence.

a) If Jazzoleon and his fans do not care about Roger and Zo, calculate how many fans will attend his concert and the price each fan will pay.

b) Calculate consumer surplus and producer surplus.

c) Calculate the damage done to Roger and Zo's quiet existence (ie, calculate the cost of the noise pollution created).

d) Calculate total surplus (ie, the sum of consumer and producer surplus minus the damage done to Roger and Zo's quiet existence).

e) If Jazzoleon and his fans considered Roger and Zo's desire for a quiet existence and factored that into their behaviour, calculate how many fans will attend his concert now and the new price that each fan will pay.

f) Calculate the new consumer surplus and producer surplus.

g) Calculate the damage done to Roger and Zo's quiet existence now.

h) Calculate the new total surplus.

i) If the government had perfect information about the cost Jazzoleon and his fans impose on Roger and Zo, briefly describe two incentive-based policies it could impose.