Consider a Perfectly Competitive Market with Inverse Market Supply $P = 5 + 3 Q ^ { s }$

question 20

Multiple Choice

Consider a perfectly competitive market with inverse market supply $P = 5 + 3 Q ^ { s }$ and inverse market demand $P = 50 - 2 Q ^ { d }$ . Suppose the government subsidizes this market with a subsidy of $\$ 5$ per unit. What is the equilibrium quantity traded after imposition of the subsidy?

• A) \(Q = 10\)
• B) \(Q = 12.5\)
• C) \(Q = 9\)
• D) \(Q = 7.5\)

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