3.4 In a large economics class of 430 students, each student would buy either one copy of the textbook or would not buy it. Students with different reservation prices for the textbook (the maximum price that the students would pay for the textbook) can be grouped as below: (Hint: Buyers and sellers are in groups, so you should regard it as a discrete case.) GROUP RESERVATION PRICE ($) NUMBER OF STUDENTS IN THE GROUP 550 40 500 50 450 60 400 60 IOnMOOD 350 60 300 80 250 40 200 40 There are also a few sellers who are willing to sell the textbook at or above the following prices. The sellers are price takers. SELLER RESERVATION PRICE ($) NUMBER OF COPIES IT SELLS 250 100 300 100 350 70 400 80 450 100 (a) State and briefly explain TWO possible factors that would affect each student's reservation price? (b) Construct the demand and supply schedules (with price and quantity demanded/quantity supplied). (c) What are the equilibrium price and quantity of the textbook? (d) What are the consumer surplus and producer surplus in this equilibrium? To encourage students to buy the textbook, a subsidy of $100 is given to the sellers who buy the textbook. (e) What are the demand and supply schedules in this case? (f) In the new equilibrium with subsidy, what is the price paid by student from their own money? What is the price the sellers can receive (from buyers and government altogether) per textbook? What is the equilibrium number of books transacted? (g) If there are indeed no other factors affecting the social marginal costs and benefits (such as externalities to be introduced in Topic 6), is there any deadweight loss under the subsidy? If so, how much is the deadweight loss