Problem
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. [Hint: The domestic supply curve becomes P = 10+0.1Q].
(d) Compute the cost to the government of this scheme.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.