QUESTION 1 Let's say the effects of climate change become more aggressive. Rising sea levels erode coastal towns, flood estuaries and upset the ecological balance of coastal wildlife. The coastal nation of Kiribati is adversely affected and the fresh water supply becomes limited. As a result, fresh water is sold at a much higher price than normal, provoking cries of \"price gouging\". Amidst the crisis, consider the market for desalination devices. In this market the supply curve for device A is given by Q5 = 10 PA 5P3 and demand curve for device A is 00 = 1000 15PA + 10PC, where PA,PB and PC denotes the prices of devices A, B and C respectively. i) Assume that PB is fixed at $10 and PC = $50. Calculate the equilibrium price and quantity of desalination device A. ii) Suppose PB = $10, PC = $50 and there is a price ceiling of $50 on device A specifically. What is the excess demand for device A as a result? Illustrate your answer on a graph. iii) Calculate the consumer and producer surplus before and after the price ceiling is imposed in the market for device B. Calculate any deadweight loss that results. iv) If the government introduces a tax on these desalination devices which is paid by the suppliers, what is the effect in the market? Sketch the supply and demand diagram and include the shift in either the supply or demand curve. Question 1 (iii) should be for device A, so the question should read: "Calculate the consumer and producer surplus before and after the price ceiling is imposed in the market for device A. Calculate any deadweight loss that results."