Question

Assume the government places a $1.00 subsidy on the sale of every bottle of hand santizer. The subsidy is paid to the produce
Price (per bottle) 0 1 2 3 4 5 6 7 8 Quantity (billions of bottles) Instructions: Round your answers for price to two decimal
0 0
Add a comment Improve this question Transcribed image text
Answer #1

Answer 1:

After the subsidy put in place the consumers pay a price of $2 per bottle and the price producers receive after the subsidy is paid is $3 (2 from consumer+1 as subsidy from the government) per bottle.

Answer 2:

After the subsidy is put in place, the equilibrium quantity is 4 billion bottles of hand sanitizer and so the government pays $4 billion as a subsidy to the producers.

Add a comment
Know the answer?
Add Answer to:
Assume the government places a $1.00 subsidy on the sale of every bottle of hand santizer....
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT