| Question | 4. You are given the following information. The demand for solar energy in California is Qº = 80-8p while the supply of solar energy is Q = Z. Given this information, answer the following questions. a. What is the price in the market and the quantity of solar energy produced? b. Suppose the government of California gives a subsidy to producers of solar energy of $10 per unit produced. What happens to price and quantity in the market? What happens to consumer surplus? What happens to producer surplus? Given your results does the subsidy make society better or worse off? C. Redo your answer to b. using the assumption that the subsidy is given to consumers. -30+28 |
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| Subject | economy |
