2. The market for bagels in Philadelphia is perfectly competitive. In Philadelphia, the daily demand for bagels is Qa = 15,000 - 5,000P, which is graphed as D in the figure below. The industry supply of bagels in Philadelphia is Os = -6,000 + 10,000P, which is graphed as S in the figure. 3.00 Price of bagels (dollars) 2.00 S 1.00 0.60 D 5,000 10,000 15,000 Quantity of bagels (per day) a. What is the market-clearing price of bagels in competitive equilibrium? How many bagels are bought and sold daily in Philadelphia? (You can solve mathematically using the equations for demand and supply, or you can use the demand and supply lines in the figure, which are drawn precisely to scale.) b. Explain why the Philadelphia bagel market is expected to achieve productive efficiency in competitive equilibrium. c. Suppose that Philadelphia bagel businesses charged a price of $2.60 and sold 2,000 bagels per day. Explain carefully why society would benefit from an increase in bagel production.5!. Suppose that Philadelphia bagel businesses produced 10,000 bagels per day and charged a price of $1.60. Explain carefully why society would benet from a decrease in bagel production. 6. How does the market-clearing price found in part a serve to ration bagels to the consumers who place the highest value on them? f. Does the Philadelphia bagel market achieve social economic efciency? Why? Using the demand and supply conditions given, answer the following questions concerning consumer, producer, and social surplus in the Philadelphia bagel market. g. For the 2,000th bagel sold each day in Philadelphia, compute the consumer surplus, pro- ducer surplus, and social surplus when the price of a bagel is $1.40. h. Compute total consumer, producer, and social surplus when 2,000 bagels per day are produced and consumed at a market price of $1.40. 1'. At the equilibrium price and quantity, compute social surplus. j. Is your computed value for social surplus in competitive equilibrium (part 0) higher or lower than your computed value for social surplus at 2,000 bagels per day (part b)? Is this what you expected? Explain. Suppose that the mayor of Philadelphia asks the city council to impose a price ceiling on bagels sold in Philadelphia. If the ceiling price is set at $0.80 per bagel, answer the following questions (and assume that bagels are somehow rationed to the consumers possessing the highest values (i.e., demand prices) for bagels: k. Does the ceiling price cause a surplus or shortage of bagels in Philadelphia? What is the amount of the surplus or shortage? 1. Calculate consumer surplus under the price ceiling. Are bagel consumers in Philadelphia better off with the mayor's price ceiling on bagels? Explain carefully. m. Calculate producer surplus under the price ceiling. Are Philadelphia bagel producers better off with the mayor's price ceiling on bagels? Explain carellly