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Suppose that the market demand function for cows is Q=1,000,000p^2, where Q is the number of cows per month and p is the price per
Suppose that the market demand function for cows is Q=1,000,000p^2, where Q is the number of cows per month and p is the price per cow. The market supply function is Q=p. What are the equilibrium price and quantity of cows? What is the consumer surplus, the producer surplus, and welfare? Now, suppose that the government provides a subsidy of $100 per cow. What are the new equilibrium price and quantity, the consumer surplus, the producer surplus, and welfare
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