The demand function of gasoline is Q = 50 – 4.9P, and the supply function is Q = 6+ 2P. Suppose that the government decides to subsidize the consumers $1 for each unit of gasoline consumed. What is the resulting deadweight loss? Answer: 1.82

The demand function of gasoline is Q = 50 – 4.9P, and the supply function is Q = 6+ 2P. Suppose that the government decides to subsidize the consumers $1 for each unit of gasoline consumed. What is the resulting deadweight loss? Answer: 1.82

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter3: Market Demand And Supply

Section3.A: Consumer Surplus, Proudcer Suplus, And Market Efficency

Problem 13SQ

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Question

The demand function of gasoline is Q = 50 – 4.9P, and the supply function is
Q = 6+ 2P. Suppose that the government decides to subsidize the consumers $1 for each
unit of gasoline consumed. What is the resulting deadweight loss?
%3D
Answer: 1.82

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