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Canada: Electric Vehicle Subsidy Program Even though controversial, electric vehicles (EVs) seem to be more environmentally friendly than gasoline-fueled vehicles. The Canadian government has been encouraging Canadians to purchase EVs by offering consumers some subsidies. Because you can multi-task, your boss at Aeon Insights has assigned you to analyze three different policies. Your first task is this EV subsidy policy assessment. From published studies, you know the following information: Demand for EVs: P = 100,000 - 500Q Supply of EVs: P = 40,000 + 500Q Positive externality: At $10,000 per EV because of the expected cut in carbon dioxide emission. To help visualize the situation, you constructed Figure 1 below to examine Questions #1, #2, #3 and #4: Supply Po Du Demand Figure I: Electric Vehicle Subsidy Policy #1: The government does not intervene. Before any government intervention, the social surplus (SS) is equal to O a. $2.400.000 O b $1,800,000 O. $2,100,000 Od. $5.700,.000

Canada: Electric Vehicle Subsidy Program Even though controversial, electric vehicles (EVs) seem to be more environmentally friendly than gasoline-fueled vehicles. The Canadian government has been encouraging Canadians to purchase EVs by offering consumers some subsidies. Because you can multi-task, your boss at Aeon Insights has assigned you to analyze three different policies. Your first task is this EV subsidy policy assessment. From published studies, you know the following information: Demand for EVs: P = 100,000 - 500Q Supply of EVs: P = 40,000 + 500Q Positive externality: At $10,000 per EV because of the expected cut in carbon dioxide emission. To help visualize the situation, you constructed Figure 1 below to examine Questions #1, #2, #3 and #4: Supply Po Du Demand Figure I: Electric Vehicle Subsidy Policy #1: The government does not intervene. Before any government intervention, the social surplus (SS) is equal to O a. $2.400.000 O b $1,800,000 O. $2,100,000 Od. $5.700,.000

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Canada: Electric Vehicle Subsidy Program Even though controversial, electric vehicles (EVs) seem to be more environmentally friendly than gasoline-fueled vehicles. The Canadian government has been encouraging Canadians to purchase EVs by offering consumers some subsidies. Because you can multi-task, your boss at Aeon Insights has assigned you to analyze three different policies. Your first task is this EV subsidy policy assessment. From published studies, you know the following information: Demand for EVs: P = 100,000 - 500Q Supply of EVs: P = 40,000 + 500Q Positive externality: At $10,000 per EV because of the expected cut in carbon dioxide emission. To help visualize the situation, you constructed Figure 1 below to examine Questions #1, #2, #3 and #4: Supply Demand Qu Q Figure 1: Electric Vehicle Subsidy Policy #1: The government does not intervene. Before any government intervention, the social surplus (SS) is equal to O a. $2,400,000 $1,800,000 Oc. $2,100,000 O d. $5,700,000
Transcribed Image Text:Canada: Electric Vehicle Subsidy Program Even though controversial, electric vehicles (EVs) seem to be more environmentally friendly than gasoline-fueled vehicles. The Canadian government has been encouraging Canadians to purchase EVs by offering consumers some subsidies. Because you can multi-task, your boss at Aeon Insights has assigned you to analyze three different policies. Your first task is this EV subsidy policy assessment. From published studies, you know the following information: Demand for EVs: P = 100,000 - 500Q Supply of EVs: P = 40,000 + 500Q Positive externality: At $10,000 per EV because of the expected cut in carbon dioxide emission. To help visualize the situation, you constructed Figure 1 below to examine Questions #1, #2, #3 and #4: Supply Demand Qu Q Figure 1: Electric Vehicle Subsidy Policy #1: The government does not intervene. Before any government intervention, the social surplus (SS) is equal to O a. $2,400,000 $1,800,000 Oc. $2,100,000 O d. $5,700,000
Policy #2: Consumption Subsidy at $10,000 per EV The Canadian government can offer consumers of EV a $10,000 rebate/refund per unit. The SS is equal to O a. $2,450,000 O b. $3,850,000 Oc. $3,150,000 O d. $4,550,000
Transcribed Image Text:Policy #2: Consumption Subsidy at $10,000 per EV The Canadian government can offer consumers of EV a $10,000 rebate/refund per unit. The SS is equal to O a. $2,450,000 O b. $3,850,000 Oc. $3,150,000 O d. $4,550,000
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