The market for bauxite (an aluminum ore) is perfectly competitive. Market

inverse demand is given by ()=, where price is measured in dollars per ton and Q

is measured in millions of tons. Market inverse supply of bauxite is ()=+, where price is measured in dollars per ton and Q

is measured in millions of tons. [Note: in this problem consider a static market equilibrium only.]

5 a.

Calculate the equilibrium price and quantity in this market. Represent your solution

using a graph.

5 b.

Calculate producer and consumer surplus. Identify consumer and producer surplus on a

graph that illustrates equilibrium in this market.