Question 3 Suppose that the demand and supply of petrol in Australia is shown in Table 1. Table 1: Hypothetical Demand and Supply Figures for Petrol Price (OIL) Quantity Demanded Quantity Supplied Mlea MU da (a) Suppose that a political crisis in the Middle East triggered a decrease in the supply of petrol to Australia by 8 megalitres per day at every price. Assume the market for petrol is unregulated. {i} What is the new equilibrium price resulting from the political crisis in the Middle East? (ii) What is the new equilibrium quantity traded resulting from the political crisis in the Middle East? (1 -I- 1 = 2 marks] (b) Suppose the government impose a price ceiling of 60 cents per litre of petrol to avoid consumer hardship from the decrease in the supply of petrol mentioned in part (a). (l) How much petrol will be demanded by consumers? {ll} How much petrol will be offered for sale by suppliers? (iii) How much petrol will actually be sold? (iv) Is there a surplus or shortage of petrol. and how much is the surplus or shortage of petrol? (v) With the imposed price ceiling what is the highest price consumers are willing to pay for the last litre of petrol available