Price and Quantity Graph of a Subsidy to Suppliers (answers inside, need explanation)
http://i.imgur.com/Wx7QMnb.png
This mainly concerns (b).
- Qsub is less than the Qe. Should this be higher since supply will shift right(?) with this subsidy?
- How do you calculate those value of the new Q and P? My professor said something about P(Demand under subsidy)-P(supply under subsidy)=Subsidy amount. Solve for one of those and use substitution. Can someone explain how would I do it?
Posted Feb 16, 2017, 11:15 PM UTC
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