In a Certain Kingdom, the Demand Function for Rye Bread

question 33

Multiple Choice

In a certain kingdom, the demand function for rye bread was q = 381 - 3p and the supply function was q = 5 + 7p, where p is the price in zlotys and q is loaves of bread.The king made it illegal to sell rye bread for a price above 32 zlotys per loaf.To avoid shortages, he agreed to pay bakers enough of a subsidy for each loaf of bread so as to make supply equal demand.How much would the subsidy per loaf have to be?

• A)21 zlotys
• B)14 zlotys
• C)8 zlotys
• D)20 zlotys
• E)None of the above.

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