The demand and supply of ethanol (a renewable fuel from plant materials) are given by QD = 8,000 - 2,000P and QS = 1,000P - 1,000, where P is price per gallon and Q measures gallons per minute. If the government subsidizes ethanol by $0.30 per gallon, what is the deadweight loss?
A) $30
B) $7,800
C) $440
D) $119
Correct Answer:
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