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Consider the following perfectly competitive market: Price QD QS 0 100 40 1 100 60 2 100 80 3 100 100 4 100 120 5

Consider the following perfectly competitive market:

Price QD QS
0 100 40
1 100 60
2 100 80
3 100 100
4 100 120
5 100 140
6 100 160

Initially there is no government intervention in this market. Then the government introduces a subsidy to be paid to suppliers of $2 per unit. The effect on the market outcome will be?

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