The demand and supply of ethanol are given by qd = 8,000 – 2,000p and qs = 1,000p – 1,000, where p is price per gallon and q measures gallons per minute. if the government subsidizes ethanol at $0.30 per gallon, what is the deadweight loss?

Dead-weight loss is $30.

Explanation: Equilibrium in a goods market is given by,

Substituting this value of P into the demand equation we can find the equilibrium quantity.

P=$3, Q=2000 without the subsidy.

At this quantity, value of government subsidy is

Supply with subsidy is Qs= 1000(P+0.30) - 1000

Equilibrium is given by,

Qd= Qs

8000 - 2000P = 1000P + 300 - 1000

8700 = 3000P

P=$2.9 is price paid by consumers, but the sellers receive P + 0.30 = $3.2 per unit.

Q= 2,200

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explanation:

hi : ) i found this so i hope this !

"we first find value of tax in dollars.

the difference between the two prices   is: 23. 54 - 22 = 1.54

therefore the sales tax in dollars is 1.54

the tax % will be   (amount of tax / original cost price ) × 100

(1.54 / 22) × 100  → (0.07) × 100 =   7

so the tax rate is 7%

we can double check the answer.

7 % of 22   → (7/100) × 22 → 0.07 × 22 = 1.54

22 + 1.54 = 23.54"