1. Roofers sometimes fall off roofs. Assume that there are no precautions the homeowner can take to lower the probability that such an accident occurs when a new roof is being put on. Assume that when the roofers take the optimal level of precaution, the probability of an accident is 0.02 and the average cost of falling off a roof in lost wages and medical care is $20,000. The demand and supply curves for roof repair, not including any accident-related costs, are given below. Demand Supply Price Quantity Price Quantity $2000 100 $400 100 $1800 200 $500 200 $1600 300 $600 300 $1400 400 $700 400 $1200 500 $800 500 $1000 600 $900 600 $800 700 $1000 700 $600 800 $1100 800 a. Suppose that the law says that roofers must bear the costs of their accidents. They are fully aware of the relevant probabilities, and can purchase insurance at actuarially fair rates if they wish (that is, their premiums will equal expected losses). What will be the probability of an accident, and what will be the equilibrium price and quantity of roofing services