In the orange market, demand and supply are given by Q(D) = 13536 56 P and Q(S) = 1000 * P, where quantities are measured in bushels.

(a) Find the competitive equilibrium price, quantity, consumer surplus, and producer surplus.

(b) New research reveals that orange production results in environmental costs of 15 per bushel due to chemicals and energy used therein. Taking this new information into account:

i. At the competitive market equilibrium, how much total surplus is generated?

ii. At what quantity level would total surplus be maximized?

iii. Identify a policy that would lead the market to the efficient quantity level you found in part (b.ii) in equilibrium