Some research by the local university shows that eating burritos improves health in several ways. The local government decides to subsidize burrito consumption paying for $5 of every burrito sold(essentially a negative tax of $5). How many burritos will be sold ? How much will the government spend with the subsidy?

 

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22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 120 140 Market for Burritos -Demand 150 -Supply 170 190 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 120 140 Market for Burritos -Demand 150 -Supply 170 190

Answer rating: 100% (QA)

SOLUTION 204 15 107 5 0 5170 Cosk of subsidy governm to 850 4 120 140 iso 170 190 Quantly Su... View the full answer