A small country can import a good at a world price of 10 per unit. The domestic supply curve of the good is Qs = 50+5P The demand curve is Qd = 400-10P In addition, each unit of production yields a marginal social benefit of 10. a. The welfare gain from a tariff of $5 per unit levied on imports is $ (Round your answer to the nearest penny) b. The welfare gain from a production subsidy of $5 per unit $. (Round your answer to the nearest penny) c. Why does the production subsidy produce a greater gain in welfare than the tariff? JO

The demand curve is Q3=50+5P Qd=40010P In addition, each unit of production yields a marginal social benefit of 10 . a. The welfare gain from a tarif of $5 per unit levied on imports is $ (Round your answer to the nearest penny) b. The welfare gain from a production subsidy of $5 per unit $ (Round your answer to the nearest permy) c. Whiv does the production subsidy produce a greater gain in welfare than the tarit? c. Why does the production subsidy produce a greater gain in welfare than the tarit? A. The production subsidy more directly addresses the externality. B. In addition to acting as a production subsidy, the tariff acts like a consumption tax that reduces the gain in welfare C. The $5.00 production subsidy increases production more than the $6.00 tariff D. Both A and B E. All of the above d. The optimal production subsidy is \$ (Round your answer to the neavest penny)