The market demand function for corn is Q d = 15 -2P. The market supply function is Q S = 5P – 2.5, both measured in billions of bushels per year

1.)

The market demand function for corn is

Q^d = 15 -2P.

The market supply function is

Q^S = 5P – 2.5,

both measured in billions of bushels per year. The initial equilibrium price is $2.5, and the initial equilibrium quantity is 10 billion bushels. Consumer surplus is $25.00, producer surplus is $10.00, and aggregate surplus is $35.00. Suppose the government gives corn farmers a subsidy of $0.91 per bushel of corn. What will be the effects on aggregate surplus, consumer surplus, and producer surplus? What will be the deadweight loss created by the subsidy?

Instructions: Round your answers to 2 decimal places.

Amount ($)  

New level of consumer surplus billion  ?

New level of producer surplus billion  ?

Cost of the subsidy to government billion ? 

New level of aggregate surplus billion  ?

Deadweight loss billion ?

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