D:P=-(1/400)Q+80S: P=(1/1200)Q+40

ECON4002 Coursework Problem Set page 5 (A1d) Suppose that the government then sold the cheese they bought from the farmers in the international market. At what price would the government have been able to sell all the quantity they bought from the farmers? Find the value, and add this information to the graph on the previous page. 2 marks (A1e) What is the net cost for the government to support such an export subsidy program? In other words, what is the difference between how much it cost the government to buy the amount of the cheese at 60 euros, and the revenue the government raises from selling the cheese at the price found in A1d? 4 marks