About per unit production subsidy

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Reference no: EM134039760

Question

Let's think about a per unit production subsidy. Start with an initial equilibrium price of $5 and quantity of 100 million. Now provide producers with a $1 per unit subsidy. Shade in (the cost of) the subsidy, make up numbers for the new quantity exchanged, the price consumers face (Pc) and the price producers get (Pp). Ideally you can do this without simply copying it from the book... try it over several days until you can.

Reference no: EM134039760

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