If the government subsidizes growers at $4 a pound, who gains and who loses from the subsidy?

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What is the deadweight loss? Could the subsidy be regarded as being fair?

Use the following figure, which shows the market for tomatoes, to work Problems. image text in transcribed

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Economics

ISBN: 9781292433639

14th Global Edition

Authors: Michael Parkin

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Question Posted: Jan 27, 2024 10:01 PM

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If the government subsidizes growers at $4 a pound, who gains and who loses from the subsidy? What is the deadweight loss? Could the subsidy be regarded as being fair?
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If the government subsidizes growers at $4 a pound, who gains and who loses from the subsidy?

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Price (dollars per pound) 12 10 2 0 1 S D 2 3 4 5 Quantity (billions of pounds per year)

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Lets go through this step by step 1 Who gains and who loses from the subsidy Growers They gain from the subsidy because they receive an additional 4 f...View the full answer

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