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Suppose that a policy aimed at reducing pollution resulted in increased crop yields and increased nutritional value of rice e.g., higher amounts of important nutrients. The marginal cost of rice production before and after the policy's effects were felt are given by MC = 1000 + 2Q and MC = 600 + 2Q respectively. Due to the higher nutritional value, the demand for rice increased from to Q = 2000 - 0.5P to Q = 2100 - 0.5P.

1. Illustrate the effects of the policy in the rice market by graphing the supply and demand curves. Identify the before and after price and quantity of rice. Graphing the demand curves requires determining the inverse demand (MWTP) equations first!

2. What is the estimated benefit of this environmental protection policy to rice suppliers? What is the estimated benefit to rice consumers? Clearly identify the areas representing these benefits in your graph.