Assume supply of a rice: QS = 1800 + 240P, 1981 Demand for rice: QD = 3550 - 266P. What is the market clearing price? Assume now that government wants to support a price of $3.60/kg and thus buys the additional amount from the market. Find the change in consumer surplus, cost to the government and gain of the producer. Instead of price support if government gives a supply restriction of 1500 kg what would happen?

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