Five Minute Exercises > Cost of a Subsidy

Problem

Given:

Market W2P = 800 - 2*Q
Market W2A = 2*Q
The good is subject to a subsidy of $160 on each unit

Determine:

The amount spent by the government on the subsidy.

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Peter J Wilcoxen, The Maxwell School, Syracuse University
Revised 09/28/2010