Economics 2281 · O Level · Supply

Supply — practice question

A government provides farmers with a subsidy of $5$ per kilo in order to supply food in the open market, where $X$ marks the original equilibrium position. The outcome is shown in the diagram. What will be the new equilibrium price and the quantity supplied after the subsidy?

  • 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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