Asked by
Hannah Turner
on Dec 01, 2024
Verified
In a certain kingdom, the demand function for rye bread was q = 181 - 8p and the supply function was q = 13 + 6p, where p is the price in zlotys and q is loaves of bread.The king made it illegal to sell rye bread for a price above 6 zlotys per loaf.To avoid shortages, he agreed to pay bakers enough of a subsidy for each loaf of bread so as to make supply equal demand.How much would the subsidy per loaf have to be?
A) 21 zlotys
B) 20 zlotys
C) 14 zlotys.
D) 14 zlotys
E) None of the above.
Demand Function
A mathematical expression showing the relationship between the quantity demanded of a good and its price, holding other factors constant.
Supply Function
A numerical model illustrating how the amount of a product provided is related to its cost.
Subsidy
A subsidy is a financial contribution provided by the government or a public body to support businesses, consumers, or sectors, reducing the price of goods or services.
- Investigate the repercussions of government initiatives, including assistance and price controls, on market performance.
Verified Answer
YG
Learning Objectives
- Investigate the repercussions of government initiatives, including assistance and price controls, on market performance.