Suppose that, in the market for cars, demand is given by P= 10 - Q and supply is given by P= Q.

A. What is the market price that maximises total economic surplus?

B. Illustrate on a graph and calculate consumer and producer surplus at this price. (Remember to clearly label any relevant prices and quantities.)

C. Explain why no other market price leads to a Pareto efficient outcome.

(You can draw the graph, take a picture and attach it here.)