Macroeconomics 1st Edition by Dean Karlan,Jonathan Morduch

Exercise 15

Demand and supply of laptop computers are given in Figure 6P-4. The quantity of laptops is given in thousands. Suppose the government provides a $300 subsidy for every laptop computer that consumers purchase.
a. What will be the quantity of laptops bought and sold at the new equilibrium?
b. What will be the price consumers pay for laptops under the subsidy?
c. What will be the price that sellers receive for laptops under the subsidy?
d. How much money should the government budget for the subsidy?