Relative to the unregulated market outcome, what is the change in producer surplus brought about the $3 subsidy per unit?

Question

Relative to the unregulated market outcome, what is the change in producer surplus brought about the $3 subsidy per unit?

BlackTom AI · Accepted Answer

We need to examine how a per-unit subsidy affects producer surplus (PS) relative to the unregulated outcome.

First, recall the key relationship: the change in producer surplus from a per-unit subsidy equals the subsidy amount times the change in the quantity produced (ΔQ). In symbols, ΔPS = s × ΔQ, where s is the subsidy per unit.

Option-by-option analysis:
- Option "$4.5.": This would imply ΔPS = 4.5, which is not consistent with the standard rectangle-area calculation for a per-unit subsidy unless ΔQ and s are arranged to yield 4.5. Given s = 3, this would require ΔQ = 1.5 units. Without evidence that the quantity changes by 1.5 units, this is unlikely in the typical discrete-quantity context.
- Option "-$9." (negative $9): A subsidy pays producers more, so producer surplus should not decrease as a result of the subsidy. Therefore a negative change contradicts the direction of the subsidy’s effect on PS.
- Option "$9.": With a subsidy of s = 3 per unit, a common outcome is that the quantity produced increases by 3 units (ΔQ = 3) relative to the unregulated outcome. The increase in PS is then ΔPS = s × ΔQ = 3 × 3 = 9. This matches the standard area of a rectangle representing the subsidy gain on the PS curve.
- Option "$6.": This would correspond to ΔQ = 2 units (since 3 × 2 = 6). If the quantity rise were only 2 units in the given scenario, this could be correct, but typical problems with a $3 subsidy and the stated change in PS aim for a whole-number multiple that aligns with a 3-unit quantity increase, yielding $9 rather than $6.

In short, the subsidy per unit directly scales the gain in producer surplus by how much the quantity produced increases. If ΔQ is 3 units under a $3 per-unit subsidy, the change in PS is 3 × 3 = 9. The other options either misstate the direction (negative), rely on an unlikely ΔQ value, or provide an inconsistent product of s and ΔQ given the common setup of this problem.

Relative to the unregulated market outcome, what is the change in producer surplus brought about the $3 subsidy per unit?

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Relative to the unregulated market outcome, what is the change in producer surplus brought about the $3 subsidy per unit?

查看解析

登录即可查看完整答案

类似问题

Producer surplus is the amount a seller is paid minus the cost of production.

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24. The producer surplus increases whenever the price increases

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Part 1In the​ figure, when production is 3 units with a price of​ $3, the producer surplus in this market equals A. b​ + g. B. a​ + b​ + f​ + g​ + h​ + i. C. f​ + g. D. a​ + b​ + f​ + g.

MC Qu. 20 Use the table below to answer... Use the table below to answer the following question. Units Market Price Minimum Acceptable Price 1 $10 $2 2 10 4 3 10 6 4 10 8 5 10 10 6 10 14 What is the value of producer surplus in the table above?

更多留学生实用工具

希望你的学习变得更简单

Part 1In the figure, when production is 3 units with a price of $3, the producer surplus in this market equals A. b + g. B. a + b + f + g + h + i. C. f + g. D. a + b + f + g.