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The Ministry of Tourism in the Republic of Palau estimates that the demand for its scuba diving tours is given by Q^D = 6,000 – 20P, where Q is the number of divers served each month and P is the price of a two-tank dive. The supply of scuba diving tours is given by Q^S = 30P – 2,000. a. Solve for the equilibrium price and quantity. b. Find the value of the consumer surplus received by divers visiting Palau. (Hint: It may help to draw a graph.) c. Find the value of producer surplus received by dive shops. (Hint: It may help to draw a graph.) d. Suppose that the demand for scuba diving services increases, and that the new demand is given by Q^D = 7,000 – 20P. Calculate the impact of this change in demand on the values you calculated in parts (a) through (c). e. Are consumers better off or worse off as a result of the demand increase? How about producers?

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