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Suppose the quantities of gas demanded (Qd) in a region vary by time period (periods 1 and 2) and depend on the prices in the periods (P1 and P2) as shown below:Qd1 = 50 - 10P1Qd2 = 120 - 10P2The quantity of gas supplied (Qs) in either period is given by Qs = 30P - 40.
(a) Without storage, find the equilibrium prices and quantities in each period.
(b) Graphically elucidate the derived storage function and carefully explain and show how you determined the location of the two intercepts of the function.
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