Economics 0455 · IGCSE · Supply

Supply — practice question

A government pays farmers a subsidy of $\$5$ for each kilo supplied of food in the open market, where $X$ marks the initial equilibrium position. The outcome is shown in the diagram. What are the new equilibrium price and the quantity supplied after the subsidy is introduced?

  • AEquilibrium price $10$, quantity supplied $16$
  • BEquilibrium price $13$, quantity supplied $20$
  • CEquilibrium price $15$, quantity supplied $16$
  • DEquilibrium price $20$, quantity supplied $8$

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