Compute the cost to the government of this scheme

Reference no: EM131072177

The domestic demand for office printers is given by P = 40-0.2Q. The supply of domestic producers is given by P = 12+0.1Q, and international supply by P = 20.

(a) Illustrate this market geometrically.

(b) Compute total demand and the amounts supplied by domestic and foreign suppliers.

(c) If the government gives a production subsidy of $2 per unit to domestic suppliers in order to increase their competitiveness, calculate the new amounts supplied by domestic and foreign producers.

(d) Compute the cost to the government of this scheme.

Reference no: EM131072177

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