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The government offers a $9 per-unit subsidy for buyers in this market. Compute consumer surplus, producer surplus, government revenue and deadweight loss in this new setting. Are firms better or worse
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The government offers a $9 per-unit subsidy for buyers in this market. Compute consumer surplus, producer surplus, government revenue and deadweight loss in this new setting. Are firms better or worse off with the subsidy

User Bstenzel
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Step-by-step explanation:

Subsidies are meant to reduce the money paid by buyers for units of commodity from the producers, while also reducing the selling price imposed by the producers on their sellers.

For example, the initial cost per unit of a popular commodity is $19 and the government then offers a $9 per-unit subsidy for buyers.

Consumer surplus= $9

Producer surplus= 10+9=$19

User Crabar
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