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a. Find the market equilibrium price and quantity. Find consumer surplus, producer surplus, and total welfare at the equilibrium. Is there deadweight loss in this market (in other words, is this the efficient quantity)?
b. Suppose the government wants to promote reading and so it subsidizes the suppliers of books. Find the new equilibrium quantity with an $4 per unit subsidy. What is the price consumer's pay and the price that producer's receive?
c. What are the new consumer surplus, producer surplus, and total welfare? Is there deadweight loss in this market? If so, how much?
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