3) Consider a commodity X whose demand function is 100-2P and which has a perfectly elastic supply curve. Initial price of the commodity is 40 $ . When the government puts a subsidy of 10% on X answer...

3) Consider a commodity X whose demand function is 100-2P and which has a perfectly<br>elastic supply curve. Initial price of the commodity is 40 $ . When the government<br>puts a subsidy of 10% on X answer the following by drawing a graph<br>a) Find the price after the subsidy.<br>b) How much does the government pay as subsidy?<br>c) Is there excess burden? If so, how much?<br>

Extracted text: 3) Consider a commodity X whose demand function is 100-2P and which has a perfectly elastic supply curve. Initial price of the commodity is 40 $ . When the government puts a subsidy of 10% on X answer the following by drawing a graph a) Find the price after the subsidy. b) How much does the government pay as subsidy? c) Is there excess burden? If so, how much?

Jun 11, 2022

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3) Consider a commodity X whose demand function is 100-2P and which has a perfectly elastic supply curve. Initial price of the commodity is 40 $ . When the government puts a subsidy of 10% on X answer...

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