Question
Consider a perfectly competitive market with market supply of Q S = -1.67 + .33P and market demand of Q D = 25 - .5P.Suppose
Consider a perfectly competitive market with market supply of QS = -1.67 + .33P and market demand of QD = 25 - .5P.Suppose the government subsidizes this market with a subsidy of $5 per unit.What is the equilibrium quantity traded after imposition of the subsidy?Please round and write the answer in billions and round to two decimals, for example 3.54 or 5.65.Use a minus sign to indicate if the number is negative.
Answer: Therefore the equillibrium quantiy=39.77
Explanation:
equilibrium Q and P before subsidies
-1.67+0.33P=25-0.5P
-1.17P=24.67
p=-21.09
Q=35.54
after subsidies of $5
the price becomes -24.67-5=-29.54
therefore the equillibrium quantity=25--0.5*29.54=39.77
37.What is the price consumers pay for the product?Please round and write the answer to one cent, for example $2.43 or $0.56.Use a minus sign to indicate if the number is negative.
Answer:
38.What is the price producers receive for the product?Please round and write the answer to one cent, for example $2.43 or $0.56.Use a minus sign to indicate if the number is negative.
Answer:
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started