Assume that qdnbsp 80-2p and qsnbsp 2p-20 and the market

Question

1. The city of Austin can buy roads or light rail.  If 5 miles of roads cost $1 million and 10 miles of light rail cost $10 million, what is the city's opportunity cost of 20 miles of light rail?

2. Suppose the demand curve is: P = 200 - 2Q_D and the supply curve is: P = 100 + 3Q_S.  What is producer surplus in the market at the equilibrium price and quantity?

3. Assume that Q_d = 80-2P and Q_s = 2P-20 and the market is in equilibrium. If the government imposes a price ceiling at $20 in this market, what is the loss in producer surplus?