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What (if anything) is the deadweight cost associated with this subsidy? Part III. Subsidies. Consider the following depiction of the market for electric vehicles (EVs)

What (if anything) is the deadweight cost associated with this subsidy?

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Part III. Subsidies. Consider the following depiction of the market for electric vehicles (EVs) in California, suggesting that 20,000 EVs will be sold at a price of $40,000. Suppose now that Governor Newsom now offers a subsidy of $20,000 for each customer purchasing an EV in California. $80 Supply $70 Price ($000s) $60 $50 $40 $30 $20 $10 Demand SO 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 Quantity of Electric Vehicles

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