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The graph represents the market demand and supply for the preschool program, Headstart. A graph plots a demand and a supply curve with Quantity of
The graph represents the market demand and supply for the preschool program, Headstart. A graph plots a demand and a supply curve with Quantity of students along the horizontal axis and Price along the vertical axis. The supply curve starts at the origin and has a positive slope. The demand curve starts at 450 dollars on price and has a negative slope. The curves intersect at 300 students, 300 dollars. The supply curve passes through the following coordinates for quantity of students and price: 200 students, 200 dollars; 250 students, 250 dollars; 400 students, 400 dollars. The demand curve passes through the following coordinates for quantity of students and price: 100 students, 400 dollars; 400 students, 250 dollars; 500 students, 200 dollars. If the socially optimal enrollment is 400 students, the government could achieve this with a Pigouvian subsidy of $_____ per student
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