1. The demand in a perfectly competitive market for walnuts is given by P = 28 0.005Q. The supply is given by P = 2 + 0.005 Q. Here, P is the price (in $/kg) and Q is the quantity demanded/ supplied (in kg/day). a. Find the market equilibrium price P and quantity Q. Show your work. (3) b. Suppose the government introduces a price ceiling nobody is allowed to charge the price above $13/kg. Will there be a shortage or a surplus? Illustrate graphically. (3)