Economics 9708 · AS & A Level · Maximum and minimum prices

Maximum and minimum prices — practice question

The diagram illustrates the demand and supply curves for a commodity. A government subsidy shifts the supply curve from S1 to S2. Which area represents the gap between the economy's cost of producing the extra output (Q1 – Q2) and the amount consumers value this extra output?

  • Aarea A
  • Barea B
  • Carea C
  • Darea D

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