ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Given:

an inverse demand equation of P = 50 - 0.5Q, 

inverse supply equation of P = 0.333Q, 

a. What is the Consumer Surplus, Producer Surplus, and Total surplus after giving a subsidy of 10 (s=10) to sellers (inverse supply equation with subsidy: P = 0.333Q - s)?

Calculate and illustrate through a graph. (TS after the subsidy - cost of subsidy)

b. What happened to the CS, PS and TS after subsidy? Did it result to Deadweight Loss?

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