A-LevelEconomicsGovernment microeconomic intervention9708/12 · Oct/Nov 2017 · Q161 Mark
The diagram shows the market for heating oil. [Figure showing supply curve S and demand curve D intersecting] If the government introduces a production subsidy, how will the financial benefit be shared between consumers and producers?
This question uses a diagram from the original paper, which isn't shown here. Open the full paper from the past papers archive to see it.
AIt will be shared equally between producer and consumer.
BIt will go entirely to the producer.
CThe majority will go to the consumer.
DThe majority will go to the producer.
✓ Correct answer
D: The majority will go to the producer.
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