Suppose that the State of Connecticut decides to subsidize the cost of purchasing a treadmill for cardiac patients, as prescribed by their doctors. Prior to the program, the equilibrium price of treadmills was $800, and the equilibrium quantity purchased was 50,000.
The state decides to subsidize $600 of the cost of the treadmill, and with the subsidy, the quantity that consumers wish to purchase is 70,000. Manufacturers are willing to supply this quantity at a price of $1,000.
The cost of this program to the State of Connecticut is $___ million.
After the subsidy, consumers will pay ___% of the cost of the treadmill, and the state will pay ___% of the cost.
How can I calculate both?