The production effect of the export subsidy is shown by area(s) O d. O b. O (d+i+j). O (b+f+g).

Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter6: The Economics Of Political Action
Section: Chapter Questions
Problem 15CQ
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The figure below illustrates the impact of an export subsidy as imposed by a large country. No imports are permitted.
Price
D D₁
O d.
O b.
So
O (d+i+j).
O (b+f+g).
S₁
D
Sa
The production effect of the export subsidy is shown by area(s)
Domestic price with subsidy
World price
World price with subsidy
Quantity
Transcribed Image Text:The figure below illustrates the impact of an export subsidy as imposed by a large country. No imports are permitted. Price D D₁ O d. O b. So O (d+i+j). O (b+f+g). S₁ D Sa The production effect of the export subsidy is shown by area(s) Domestic price with subsidy World price World price with subsidy Quantity
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