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

question 13

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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Definitions:

Separate Clutches

Separate clutches refer to systems where multiple clutches are used independently to control different sets of gears, allowing for more efficient transmission and power distribution in heavy machinery or performance vehicles.

Four-Speed

Describes a transmission or gearbox with four distinct gear ratios.

Hydromechanical Transmission

A combination of hydraulic and mechanical systems in a transmission to transfer power from the engine to the wheels.

Fourth Clutches

Clutches within an automatic transmission that engage and disengage the fourth gear, contributing to the vehicle's gear shifting process.