Assume that the demand curve for olive oil is given by Q = 100 10P, where P is the price per gallon and Q is the quantity demanded per year. The supply curve is horizontal at a price of $2.

a. Assuming that the market is competitive, what is the price per gallon of olive oil and the number of gallons sold?

b. If the producers of olive oil are able to form a cartel and marginal revenue is given by 10 Q/5, what is the cartel price, and how many gallons of olive oil are purchased?

c. Calculate the deadweight loss of the cartel