Take the following representation for random market. Ignore the scale of the graph. P 10 40 p38 p=36 p* = 30 P = 27 PO=26 25 9 = 20 q = 40 q = 100 S q=140 Po Q Note: The initial scenario (reference case) is the equilibrium in a closed economy (P*, Q*) = (30, 100) 1. For the initial scenario, what is the consumer and producer surplus? Provide a brief explanation of each concept. 2. If the government imposes a price floor at Po. What is the Economic Surplus and Deadweight Loss? Explain your answer. Does your answer change if the government imposes a price ceiling at Po instead? 3. Starting with the initial scenario, analyze the changes in Economic Surplus and Deadweight Loss after the imposition of a quota of q = 40. 4. Starting with the initial scenario, what would happen if the economy is open with an international price at Po? Explain and calculate all the changes in the Economic Surplus. Make sure that you explain the quantity demanded from the internal market and the quantity that is imported. 5. If the demand function in this market is defined as Q = 400 - 10P, calculate the elasticity price of demand at p = 38, p = 30, and p = 26. Explain the intuition of why the elasticity changes depending on the price you take.