(Scenario: Freedonian Exports) in the Small Country of Freedonia, the Domestic

question 89

Multiple Choice

(Scenario: Freedonian Exports) In the small country of Freedonia, the domestic demand for widgets is represented by P = 100 - 3Q; the domestic supply of widgets is represented by P = 1Q. Now let Freedonia's government give a $15 per unit subsidy on each widget exported. What will be the new price and quantity consumed in the Freedonia domestic market?

• A) $20 and 60 units
• B) $55 and 15 units
• C) $40 and 15 units
• D) $25 and 25 units

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