Below are the demand and supply curves for hot chocolate sachets, where P is the price the sachets are sold at and Q is in thousands.

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1. [6 marks] Graph the supply and demand curves for the Hot Chocolate Sachet Market.
2. [4 marks] What is the equilibrium price and quantity at which the sachets will be sold?
3. [6 marks] What is the consumer surplus at this price? What is the producer surplus?
4. [4marks] Why is this the economically efficient amount of Hot Chocolate sachets to
5. produce?
6. [10 marks] If the Government were looking to assist consumers during self-isolation1
7. by determining that the Hot Chocolate Sachets can not be sold for any more than $5 each - what will happen to the quantity of hot chocolate sachets traded? Consumer surplus? Producer surplus? Total Economic Surplus? Explain.
8. [5 marks] Is the above Government determination economically efficient? Explain.