Sammy has a drone that he values at $1,500. Dean values the same drone at $2,000. Sammy decides to sell the drone to Dean for $1,800. The government offers a subsidy of $800 to the buyers of drones. When the gains and losses to all parties are netted out, cooperative surplus for Sammy and Dean will be ________ it would have been without the subsidy, and the subsidy ________ produce additional wealth.
A) greater than; would not
B) the same as; would not
C) greater than; would
D) less than; would not
Correct Answer:
Verified
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