Consider a perfectly competitive market. The industry demand curve is QD = 7-2P. The industry supply curve is QS = P. Suppose the government introduces a subsidy s=1 per unit sold. Which of the following is wrong? A. Consumers pay less per unit B. Deadweight loss increases C. Producers are paid more per unit D. More quantity is traded in the market E. None of the above

Consider a perfectly competitive market. The industry demand curve is QD = 7-2P. The industry supply curve is QS = P. Suppose the government introduces a subsidy s=1 per unit sold. Which of the following is wrong? A. Consumers pay less per unit B. Deadweight loss increases C. Producers are paid more per unit D. More quantity is traded in the market E. None of the above

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter24: Perfect Competition

Section: Chapter Questions

Problem 10E

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