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Let demand (Qa) and supply (Qs) of oil be equal to the following linear functions: Qd = 99-7.7 Poil + 2.8 P gas +

 

Let demand (Qa) and supply (Qs) of oil be equal to the following linear functions: Qd = 99-7.7 Poil + 2.8 P gas + 8 M Qs = 3 + 7.5 Poil - 0.8 PK-6.7 PL - 7.5 PN Where Poil is the price of oil, Pgas is the price of gas (set = 59). PK is the price of capital (set = 65), PL is the price of labour (set = 62), PN is the price of natural resource (set = 34), and M is a measure of weekly income (set = 519). Assuming that the market for oil is perfectly competitive, what is the total surplus at the current market equilibrium?

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Total surplus QaPoil QsPoil 99 77Poil 2859 8519Poil 3 75Poil 0865 6762 7534Poil 99Poil 77Poil2 166... blur-text-image

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