The figure given below shows the national market for mopeds in a country. D_dand S_d are the domestic demand and supply curves of mopeds respectively. The figure given below shows the marginal external benefit curve (MEB) of the country from the production of domestic mopeds. What will be the impact on the national well-being if, instead of imposing a tariff of $50 per unit, the government provides a subsidy of $50 per unit to the domestic manufacturers of mopeds? A)The national welfare will increase by $5 million. B)The national welfare will decline by $2.5 million. C)The national welfare will increase by $10.75 million. D)The national welfare will decline by $5 million.

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The Answer of The figure given below shows the national market for mopeds in a country. D_dand S_d are the domestic demand and supply curves of mopeds respectively. The figure given below shows the marginal external benefit curve (MEB) of the country from the production of domestic mopeds. What will be the impact on the national well-being if, instead of imposing a tariff of $50 per unit, the government provides a subsidy of $50 per unit to the domestic manufacturers of mopeds? A)The national welfare will increase by $5 million. B)The national welfare will decline by $2.5 million. C)The national welfare will increase by $10.75 million. D)The national welfare will decline by $5 million.

The Figure Given Below Shows the National Market for Mopeds