Answered: please plot a graph showing the effect…

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Economics

please plot a graph showing the effect of a government subsidy on the market for surgical masks.

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter5: Price Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 3SQP

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Question

please plot a graph showing the effect of a government subsidy on the market for surgical masks.

Expert Solution

Step 1

The amount given by the government to the producer is known as a subsidy. The main aim of subsidy is to promote the production of a certain commodity by providing an amount of money directly to producers of that commodity.
Whenever the government gives a subsidy to the producer then the supply curve will shift downwards by the amount of subsidy.

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