Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Transcribed Image Text:Macmillan Learning
Consider the following supply and demand diagram. In this market, the government subsidizes the production of this good, and
the subsidy wedge is indicated.
Price
$10
9
co
7
6
5
4
3
2
1
0
Demand
10 20 30 40 50
Supply
Subsidy
60 70 80 90
100
Quantity
a. Without the subsidy, what are the total gains from trade?
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