Question
a. A terrible drought strikes the central Ohio steppes, traditional homeland of the yaks. The supply schedule shifts to . The demand schedule remains as
a. A terrible drought strikes the central Ohio steppes, traditional homeland of the yaks. The supply schedule shifts to . The demand schedule remains as before. Draw the new supply schedule. Write down the equation that you would solve to find the new equilibrium price of yak butter. What is the new equilibrium price and quantity. Locate the new equilibrium price and quantity on the graph and label them and . b. The government decides to relieve stricken yak butter consumers and producers by paying a subsidy of per hundred pounds of yak butter to producers. If is the price paid by demanders for yak butter, what is the total amount received by producers for each unit they produce? When the price paid by consumers is , how much yak butter is produced?
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