A-LevelEconomicsThe price system and the microeconomy9708/12 · May/June 2022 · Q161 Mark
To improve the air quality for its citizens, a government introduces a subsidy for the producers of cars powered by batteries charged from the electricity supply. What are the likely effects of this subsidy on the price and sales of electricity?
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Aprice of electricity: falls, sales of electricity: falls
Bprice of electricity: falls, sales of electricity: rises
Cprice of electricity: rises, sales of electricity: falls
Dprice of electricity: rises, sales of electricity: rises
✓ Correct answer
D: price of electricity: rises, sales of electricity: rises
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