# Suppose that the demand for a good is given by Qd = 381 − 3P and its supply is g

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Suppose that the demand for a good is given by Qd = 381 − 3P and its supply is given by Qs = 5 + 7P . The government announces a price ceiling by making it illegal to sell this good for a price above \$32 per unit.
a. Calculate the shortage that would result from the price ceiling.
b. Now assume that the government wants to avoid shortages and decides to pay the sellers a sufficiently high subsidy that will eradicate the shortage. Calculate the amount of the subsidy required to achieve this goal.

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