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Calculate the value of the subsidy

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1. A. Suppose Guyana Water Inc. (GWI) faces the market demand and cost function below, calculate the optimal price regulation that would be imposed if no subsidy is given?

P = 525 - 6q
TC = 250q - q2

a.$112.50
b.$360.00
c.$195.00
d.$998.61

B. Calculate if price subsidy was given

a.$112.50
b.$360.00
c.$195.00
d.$998.61

Calculate the value of the subsidy needed if the first-best price regulation has been imposed?

P = 525 - 6q
TC = 250q - q2

a.$181.25
b.$5671.88
c.$4726.56
d.$195.00

Reference no: EM133133739

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