13P Question 4: (4 points): Demand curve for milk is Q=440 - 13P while supply curve...

 

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13P Question 4: (4 points): Demand curve for milk is Qº=440 - 13P while supply curve is Q² = 11+2, where P is measured by VND thousand per milk box, and Q by hundred thousand milk boxes. The government decided to provide a consumption subsidy of VND 6,000 per milk box. Calculate: a. What is pre- and after-subsidy gross revenue? b. What is subsidy benefit enjoyed by consumers and producers? c. What is subsidy-induced deadweight loss from consumers' and producers' sides? d. What is total cost of subsidy for state budget and total deadweight loss of the society? 13P Question 4: (4 points): Demand curve for milk is Qº=440 - 13P while supply curve is Q² = 11+2, where P is measured by VND thousand per milk box, and Q by hundred thousand milk boxes. The government decided to provide a consumption subsidy of VND 6,000 per milk box. Calculate: a. What is pre- and after-subsidy gross revenue? b. What is subsidy benefit enjoyed by consumers and producers? c. What is subsidy-induced deadweight loss from consumers' and producers' sides? d. What is total cost of subsidy for state budget and total deadweight loss of the society?

Answer rating: 100% (QA)

Given Q D 440139P Q S 1113p2 where P VND 1000 milkbox Q VND100000 440139P13P211 4401126P139P2 ... View the full answer