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Consider a Perfectly Competitive Market with Inverse Market Supply P=5+3QsP = 5 + 3 Q ^ { s }

Question 2

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Consider a perfectly competitive market with inverse market supply P=5+3QsP = 5 + 3 Q ^ { s } and inverse market demand P=502QdP = 50 - 2 Q ^ { d } . Suppose the government subsidizes this market with a subsidy of $5\$ 5 per unit. What are the equilibrium price and quantity traded before the subsidy?


A) P=30;Q=10P = 30 ; Q = 10
B) P=25;Q=12.5P = 25 ; Q = 12.5
C) P=32;Q=9P = 32 ; Q = 9
D) P=35;Q=7.5P = 35 ; Q = 7.5

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