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

question 49

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 deadweight loss resulting from the subsidy?

• A) 0, subsidies do not have a deadweight loss
• B) 2.5
• C) 5
• D) 7.5

---

Definitions:

Gestural Computing

A technology that enables users to interact with digital devices through bodily motions and gestures rather than traditional input methods like keyboards or touchscreens.

Digital Devices

Electronic tools or gadgets that store, process, or transmit information digitally, such as smartphones, computers, and tablets.

Sales Letter

A piece of direct mail designed to persuade the reader to purchase a particular product or service.

Legally Obligated

Required to act in a certain way by law.