Question

Calculate the gains in producer from the subsidy if the demand and supply of Chinese coal are
Qd = 60 − 0.5P.
Qs = −2 + 2P.

Answer 1

$$60-0.5p=-2+2p$$

$$2.5p=62$$

$$p=24.8$$

$$Q=47.6$$

To determine the profit from a subsidy, you need to know the amount of the subsidy.