Calculate the equilibrium quantity of demand

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Reference no: EM133063325

Suppose a new welfare regulation requires dairy farmers in NZ to improve the farming system (e.g., adding shelters) to improve animal welfare on farm. Before having this regulation, the NZ demand and supply function for milk are estimated to be:

Qd= 100-Pd

Qs= -50+5Ps

After the regulation in place, the supply function is now estimated to be:

Qs'= -80+5Ps'

Use the given information to answer the following questions.

-Calculate the equilibrium quantity of demand and price for milk before AND after the welfare regulation.

-Draw the demand and supply functions before AND after the welfare regulation.

-Calculate supplier surplus before AND after the welfare regulation. Are suppliers better off after the regulation? Simply explain why.

Reference no: EM133063325

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