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Question 5 Consider a market with the following demand and supply curves: QD 2400-60p = QS 40p 400 Find the producer and consumer surplus in the unregulated market. CS= $ PS = $ Suppose the government decides to provide sellers with a subsidy of s=10 per unit sold. What will be the total government spending on this subsidy and resulting deadweight loss? GS=$ DWL = $ 5 pts Now suppose the government replaces the subsidy with a price floor of p=32. What will be the resulting deadweight loss of that policy? DWL = $

Question 5 Consider a market with the following demand and supply curves: QD 2400-60p = QS 40p 400 Find the producer and consumer surplus in the unregulated market. CS= $ PS = $ Suppose the government decides to provide sellers with a subsidy of s=10 per unit sold. What will be the total government spending on this subsidy and resulting deadweight loss? GS=$ DWL = $ 5 pts Now suppose the government replaces the subsidy with a price floor of p=32. What will be the resulting deadweight loss of that policy? DWL = $

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question 5 Consider a market with the following demand and supply curves: QD 2400-60p = QS 40p 400 Find the producer and consumer surplus in the unregulated market. CS= $ PS = $ Suppose the government decides to provide sellers with a subsidy of s=10 per unit sold. What will be the total government spending on this subsidy and resulting deadweight loss? GS=$ DWL = $ 5 pts Now suppose the government replaces the subsidy with a price floor of p=32. What will be the resulting deadweight loss of that policy? DWL = $
Transcribed Image Text:Question 5 Consider a market with the following demand and supply curves: QD 2400-60p = QS 40p 400 Find the producer and consumer surplus in the unregulated market. CS= $ PS = $ Suppose the government decides to provide sellers with a subsidy of s=10 per unit sold. What will be the total government spending on this subsidy and resulting deadweight loss? GS=$ DWL = $ 5 pts Now suppose the government replaces the subsidy with a price floor of p=32. What will be the resulting deadweight loss of that policy? DWL = $
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