A market is defined by the following equations: Qd=10-(1/10)P, AND Qs=-2+(1/10)P, where P is in £. (a) Find the equilibrium price and quantity. (b) The government grants a subsidy of £20 per unit. Derive the new supply function and calc the price paid by consumers, the price recieved by producers and the new equil quantity. (c) Calc the change in condumer expenditure, the change in firm rev., and gov expendeture. and the change in consumer surplus, producer durp and welfare loss.

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