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.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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