2024, Set 2, Question 3 · Short · 5 points
Price ceiling versus subsidy for backpacks
Calculate total surplus from a supply and demand graph, decide how a price ceiling changes the quantity bought, and then work out the price buyers pay, the cost to the government, and the deadweight loss effect of a per-unit subsidy to sellers.
Lessons this question draws on
1 Read the question
The question is College Board's, from the 2024, Set 2 exam. It starts on page 5 of the PDF.
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Scoring guidelines (PDF, page 7) What the exam readers saw (Chief Reader report)
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