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In: Economics

1. Suppose that weekly demand for coal is given by P = 1800 – 2Q, and...

1. Suppose that weekly demand for coal is given by P = 1800 – 2Q, and supply is given by P = 4Q, where Q represents tonnes of coal. To support consumers, the government has decided to impose a price ceiling of $800 per tonne. This suggests that _________ of _________ will result in this market. Following the price ceiling, consumer surplus will _______ by_______.

2. In the Australian market for tea, demand is given by P = 10 - 2Q and supply is P = 2Q. Q represents tonnes of tea per year. Suppose that the government provides a subsidy of $2 per ton of tea. The introduction of the subsidy will _______ consumer surplus by ________.

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Rahul Sunny answered 2 years ago
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