Question: The demand function for oil is x = 4 p, and the supply function is x = p 2. P is the price

The demand function for oil is x = 4 − p, and the supply function is x = p − 2.

P is the price of oil, and x is the amount of oil. With this information, solve the following problems:

a. Derive the equilibrium price and the amount of oil used at this point.

b. Through economic development, demand increases to the point where the demand function becomes x = 8 − p. Determine how much the amount of oil used increases by at this point.

c. Calculate the consumer and producer surpluses when demand is maximized.

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