Economics 9708 · AS & A Level · 7.4

7.4 — practice question

The diagram illustrates the costs and benefits associated with producing a good. The firm is producing at output Q1. What would be needed to shift production to the optimal level of output?

  • Aintroducing a subsidy of UW
  • Bintroducing a subsidy of VW
  • Csetting a maximum price of P2
  • Dsetting a minimum price of P3

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