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Managerial Economics · Quiz 2 · 12 Apr 2026 · January 2026 term

Question 16: Equilibrium price in the market before the subsidy P =

Question 16

+1 markNumerical answer

Equilibrium price in the market before the subsidy P * = ______________

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Correct answer: 8

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Question 16 of 27 in the IIT Madras BS Managerial Economics (Managerial Economics) Quiz 2 paper sat on 12 Apr 2026, in the January 2026 term (Managerial Economics 06 Apr 26). It carries 1 mark.

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  1. Q1Quasi-linear preferences are linear in both the goods
  2. Q2Marginal utility does not change for a monotonic transformation of the utility function
  3. Q3MRS does not change for a monotonic transformation of utility function
  4. Q4The fraction of quantity tax paid by buyers rises as supply becomes more own-price elastic
  5. Q5The fraction of quantity tax paid by buyers rises as demand becomes more own-price elastic
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  9. Q9Choose the correct alternative
  10. Q10What is true about the optimal bundle of Anita
  11. Q11Optimal quantity of food is F=
  12. Q12Optimal quantity of clothing is C=_
  13. Q13Utility of Anita from optimal bundle is U(F, C) = _
  14. Q14What is the marginal rate of substitution of food for clothing when utility is maximized? MRS (F for C) = _
  15. Q15Equilibrium quantity (in millions) in the market before the subsidy Q = _
  16. Q17New equilibrium quantity after the subsidy Qs = _
  17. Q18Price that buyers pay now will be PB =
  18. Q19Price that the producers receive per unit will be Ps = _
  19. Q20Total cost (in million \$) to the government will be _
  20. Q21Suppose the government acts weird and removes the subsidy to impose a excise tax of \$6 per unit to producers.\ New equ…
  21. Q22Suppose the government acts weird and removes the subsidy to impose a excise tax of \$6 per unit to producers.\ Price t…
  22. Q23Suppose the government acts weird and removes the subsidy to impose a excise tax of \$6 per unit to producers.\ Price t…
  23. Q24What level of output (q) the firm will produce?
  24. Q25Producer surplus of the firm is
  25. Q26How much labor (Hours of labor per week) would the monopsonist hire to maximize profit?\ L= _
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