The demand and supply functions for cow milk in the Quebec market are given by the following equations: P=200−0.25Q
P=50+0.125Q.
​where P= Price per ton ($/ton ) and Q= Quantity of production in 000 s of tons per month a) Draw the demand-supply diagram for cow milk in Quebec and determine the market equilibrium price (Pe) and quantity of cow milk exchanged (Qe) each month. What is the dollar value of cow milk sold in Quebec each month? b) Now, suppose that in response to complaints by the Quebec dairy farmers who find the market price too low to earn a decent living the government decides to regulate the market by setting the price of milk to $110.00 per ton. What will be the impact on the quantity demanded and supplied? Illustrate the new government price and its impacts on the diagram above. c) Next, suppose that the Dairy Industry Association proposes an alternative plan to help the farmers. Instead of fixing the price of milk they propose fixing the output of milk at Q=360 thousand tons per month. Now calculate the impact of the proposed quota on the market price. d) If you were the Quebec Minister of Agriculture, which of the two approaches would you find preferable? Is there another way you could assist the farmers without harming the consumers?