Solve the following.

Tuition and cost {thousands of dollars per student] {I 2 4

20 18 16 s - MSC MSB 10 Quantity (millions Of students per year) 2. The figure above shows the market for education. Education has an external benefit. a) If the market is competitive and left unregulated, how many students will be enrolled per year? b) What is the efficient number of students? c) In the figure, show the effect of a government subsidy that moves the market to the efficient number of students. What is the amount of the subsidy and what tuition must the students pay?