The government of Islandia, a small island nation, imports heating oil at a priceof $2 per gallon and makes it available
June 8th, 2024
The government of Islandia, a small island nation, imports heating oil at a priceof $2 per gallon and makes it available to citizens at a price of $1 per gallon. IfIslandians’ demand curve for heating oil is given byP= 6 =Q, wherePis theprice per gallon in dollars andQis the quantity in millions of gallons per year,how much economic surplus is lost as a result of the government’s policy?
