2. (11pts) Let the domestic supply and demand for coal in the US he: D(P) = 120P 3(P) =P Price is in dollars per ton, quantity is in millions of tons. Suppose the world price of coal is PW = 30. a. Solve for equilibrium price and quantity in the domestic market, P\" and Q" (with no international trade}. (2pt) b. The US allows free-trade in coal. Calculate the equilibrium price, Pf, and quantity, Qf? (2pt} c. Calculate the amount of coal the US imports. (1pt) d. There is pressure on the government to put an import tariff on coal of $30 per ton. Calculate the new price and quantity, and the amount of coal Mlpt} e. Relative to free-trade, how does this tax affect (increase/decrease/unchanged} (4ptl I. ii. iii. iv. Producer surplus: Consumer surplus: Government revenues: Social surplus: Domestic consumption of coal creates a negative externalitv for US citizens: air pollution. Suppose the marginal external cost per ton of domestic coal consumption is 530. f. How does the tariff affect social surplus now (relative to no tariff)? (increase/decrease/unchanged) [This question is tricky] (1pt}