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Assume the following inverse demand function p(q)=40-q and the marginal cost function MC(q)=10+2q. The government offers...

Assume the following inverse demand function p(q)=40-q and the marginal cost function MC(q)=10+2q.

The government offers a subsidy of $9 per unit sold.

A Calculate the price and quantity without subsidy

B Calculate the price and quantity with subsidy

C What is the value of the aggregated subsides?

D What is the value of the deadweight loss caused by the subsidy?

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