Figure 9.9 shows the demand and supply of a product in a competitive market. FIGURE 9.9 $10 2 10 20 30 50 60 70 80 90 100 110 Quantity per period Refer to Figure 9.9 to answer the question. Suppose that this graph represents an industry with big external benefits and that the government wishes to increase its output by 10 units and raise its price. Which of the following will produce this result? Select one: O a. Granting a subsidy of $2 to producers. O b. Imposing an excise tax of $2. O C. Granting a subsidy of $2 to consumers. O d. Imposing an excise tax of $1. e. Granting a subsidy of $1 to producers.
Figure 9.9 shows the demand and supply of a product in a competitive market. FIGURE 9.9 $10 2 10 20 30 50 60 70 80 90 100 110 Quantity per period Refer to Figure 9.9 to answer the question. Suppose that this graph represents an industry with big external benefits and that the government wishes to increase its output by 10 units and raise its price. Which of the following will produce this result? Select one: O a. Granting a subsidy of $2 to producers. O b. Imposing an excise tax of $2. O C. Granting a subsidy of $2 to consumers. O d. Imposing an excise tax of $1. e. Granting a subsidy of $1 to producers.
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter12: Environmental Protection And Negative Externalities
Section: Chapter Questions
Problem 42P: Table 12.12, shows the supply and demand conditions for a firm that will play trumpets on the...
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