Question 5 India imports uranium at a world price of $30 per pound. But it costs $5 per pound to transport uranium from overseas to India, and the Indian importers (buyers) pay these transportation costs. So the uranium importers in India pays $35 per pound after they pay for the transportation costs.

(a) Using a diagram, illustrate demand and supply in the Indian uranium market. What is the domestic price of uranium in India (this is the price that the domestic consumers pay, and the price that domestic producers receive)? What is the consumer and producer surplus that is created in India from the uranium market? Be sure to label your diagram carefully.