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

question 8

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 are the equilibrium price and quantity traded before the subsidy?

• A) P = 30; Q = 10
• B) P = 25; Q = 12.5
• C) P = 32; Q = 9
• D) P = 35; Q = 7.5

---

Definitions:

Creditor Attempts

Efforts made by creditors to collect debts owed to them, which can include legal actions, settlement negotiations, or other collection activities.

Bargained-For Exchange

An agreement between parties where each receives something of value in exchange for something else.

Nominal Consideration

A minimal amount given in a contract that is not calculated by the actual value of the transaction but is symbolic, to make the agreement legally binding.

Moral Obligations

Ethical duties that a person feels compelled to perform based on personal beliefs about right and wrong, despite not being enforceable by law.