Consider the market for charcoal briquettes in a small neighborhood. Neighborhoods residents buy charcoal briquettes to grill food. Their demand curve is given by PD = 110 – 4QD. Charcoal briquettes...

Extracted text: Consider the market for charcoal briquettes in a small neighborhood. Neighborhoods residents buy charcoal briquettes to grill food. Their demand curve is given by PD = 110 – 4QD. Charcoal briquettes are sold by several local stores. Their supply curve is given by Ps = 10+ QD. When people grill food, they fill their neighborhood with wonderful barbeque smells that are appealing to all residents. The value of this external benefit is $5 for every bag of charcoal briquettes sold. Suppose the neighborhood government decides to implement the socially optimal quantity with a Pigouvian subsidy. Compute consumer surplus, producer surplus, government surplus, and total surplus with the subsidy.