The Commonwealth government decides to provide a specific subsidy of 40 to the buyers of bikes....

 

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The Commonwealth government decides to provide a specific subsidy of 40 to the buyers of bikes. Assume that the market demand for bikes is given by: p = 400 - Q. Assume that the supply curve for bikes is given by p = 80+ Q. Which of the following statements is true? [When answering this question, please assume that no externalities are present] O With the subsidy, the total price received by sellers increases by 10 and the deadweight loss that results from the subsidy is equal to 400. O With the subsidy, the total price received by sellers falls by 20 and the deadweight loss that results from the subsidy is equal to 200. O With the subsidy, the total price paid by buyers (including the subsidy) increases by 10 and the deadweight loss that results from the subsidy is equal to 200. O With the subsidy, the total price paid by buyers (including the subsidy) falls by 20 and the deadweight loss that results from the subsidy is equal to 400. O None of the above. The Commonwealth government decides to provide a specific subsidy of 40 to the buyers of bikes. Assume that the market demand for bikes is given by: p = 400 - Q. Assume that the supply curve for bikes is given by p = 80+ Q. Which of the following statements is true? [When answering this question, please assume that no externalities are present] O With the subsidy, the total price received by sellers increases by 10 and the deadweight loss that results from the subsidy is equal to 400. O With the subsidy, the total price received by sellers falls by 20 and the deadweight loss that results from the subsidy is equal to 200. O With the subsidy, the total price paid by buyers (including the subsidy) increases by 10 and the deadweight loss that results from the subsidy is equal to 200. O With the subsidy, the total price paid by buyers (including the subsidy) falls by 20 and the deadweight loss that results from the subsidy is equal to 400. O None of the above.

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With the subsidy the total price paid by buyers including the subsidy falls by 2... View the full answer