Suppose that the market for solar panel is perfectly competitive. Firms in the market are identical and each firm has a total cost function: =3392+12+20. q is given in number of solar panels and P in pounds. Assume that we are in the short run. (a) If the equilibrium price in the solar panel market is equal to 12, what is the quantity of panels supplied by a firm? What is the profit made by a firm at that market price? (b) Should a firm shutdown and leave the market? Discuss. (c) Given your previous answers comment on what is likely to happen on the market in the long run. Illustrate your answer with graphs. The number of solar panels demanded per year is given by =402 where is the price per panel in British pounds. The number of panels supplied is given by =420. Assume that the solar panel market is perfectly competitive. (d) Derive the equilibrium price and quantity. Calculate the consumers' and the producers' surplus at the equilibrium price. Represent them on a graph. (e) Suppose that the government introduces a quantity subsidy such that the consumer will receive 2 per panel they buy. What is the new equilibrium price paid by the consumers? What is the new price received by suppliers? What is the new equilibrium quantity? Calculate the new consumer's surplus, the new producers' surplus and the cost of the subsidy. Illustrate the effect of the subsidy graphically. (f) Calculate the share of the subsidy received by consumers and the share of the subsidy received by producers. Comment your result and link it with the elasticity of Demand and Supply. (g) Calculate the deadweight loss generated by the subsidy. What does it represent in the specific case of a subsidy?