Suppose that the market demand function for cows is Q=64,000,000p-2, where Q is the number of cows per month and p is the price per cow. The market supply function is Q=p. a. What are the equilibrium price and quantity of cows? What is the consumer surplus, the producer surplus, and welfare? b. Now, suppose that the government provides a subsidy of $500 per cow. What are the new equilibrium price and quantity, the consumer surplus, the producer surplus, and welfare?

Suppose that the market demand function for cows is Q=64,000,000p-2, where Q is the number of cows per month and p is the price per cow. The market supply function is Q=p. a. What are the equilibrium price and quantity of cows? What is the consumer surplus, the producer surplus, and welfare? b. Now, suppose that the government provides a subsidy of $500 per cow. What are the new equilibrium price and quantity, the consumer surplus, the producer surplus, and welfare?

MACROECONOMICS FOR TODAY

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter4: Markets In Action

Section: Chapter Questions

Problem 12SQ

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