Imagine that you have been given a job as an economic advisor to evaluate a certain competitive US manufacturing industry. Your (accurate) statistical analysis indicates the market is characterized by demand of Qd = 150 - 3P and supply of Qs = 2P - 10.

Solve for equilibrium price P1 and quantity Q1.

Depict the supply curve S1 and demand curve D1 on the usual P, Q diagram. Label all relevant intercepts (including two intercepts for the demand curve and one intercept for the supply curve). Clearly indicate and label the market equilibrium.

Graphically indicate the areas of Consumer Surplus (CS1) and Producer Surplus (PS1).

Compute the values of Consumer Surplus (CS1) and Producer Surplus (PS1), clearly indicating the units that CS and PS are measured in.