A subsidy is the opposite of a tax. With a $0.50tax on the buyers of ice-cream cones
Chapter 6, Problem 11(choose chapter or problem)
A subsidy is the opposite of a tax. With a $0.50tax on the buyers of ice-cream cones, the governmentcollects $0.50 for each cone purchased;with a $0.50 subsidy for the buyers of ice-creamcones, the government pays buyers $0.50 foreach cone purchased.a. Show the effect of a $0.50 per cone subsidyon the demand curve for ice-cream cones,the effective price paid by consumers, theeffective price received by sellers, and thequantity of cones sold.b. Do consumers gain or lose from this policy?Do producers gain or lose? Does the governmentgain or lose?
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