A-LevelEconomicsGovernment microeconomic intervention9708/12 · Feb/Mar 2017 · Q151 Mark

The initial market for a product is represented by the demand and supply curves D₁ and S₁ respectively. A subsidy is then introduced, represented by the shift of S₁ to S2 (+ subsidy). [Diagram] What is the incidence of the subsidy for the consumer and producer?

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APN NA

BQR TR

CQT QB

DTR QR

✓ Correct answer

B: QR TR

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Topic: Government microeconomic intervention, A-Level Economics (syllabus 9708). Multiple choice, 1 mark.
Source: A-Level Economics, Feb/Mar 2017 Paper 1 Variant 2, question 15.

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The initial market for a product is represented by the demand and supply curves D₁ and S₁ respectively. A subsidy is then introduced, represented by the shift of S₁ to S2 (+ subsidy). [Diagram] What is the incidence of the subsidy for the consumer and producer?

✓ Correct answer

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