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?
Chapter4: Markets In Action
Section: Chapter Questions
Problem 12SQ
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![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?
Enter your responses below as whole numbers.
a. The equilibrium price is $ 400
The equilibrium quantity is 400
The consumer suplus is 160000
The producer surplus is 80000.
The welfare is](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F17b95d4e-eade-46b1-8d91-5186d1ded238%2F41a4c870-7488-4eb8-ba4a-c42ef4271d7d%2Fu1tloc_processed.png&w=3840&q=75)
Transcribed Image Text: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?
Enter your responses below as whole numbers.
a. The equilibrium price is $ 400
The equilibrium quantity is 400
The consumer suplus is 160000
The producer surplus is 80000.
The welfare is
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