In the agricultural market for wheat, demand is $Q_{d}=500-2P$ and supply is $Q_{s}=3P-100$, where $P$ is the price per tonne in naira. The government introduces a per‑unit subsidy of ₦20 paid to producers. Calculate the net welfare loss to the economy resulting from this subsidy.

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The subsidy creates a net welfare loss of ₦240.

Gce Model Questions Vol1 2025 Economics Question 2

In the agricultural market for wheat, demand is \(Q_{d}=500-2P\) and supply is \(Q_{s}=3P-100\), where \(P\) is the price per tonne in naira. The government introduces a per‑unit subsidy of ₦20 paid to producers. Calculate the net welfare loss to the economy resulting from this subsidy.

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